HFMarkets (hfm.com): Market Analysis and News

Date: 20th December 2024.

BOE Sees More Support For Rate Cuts As USD Strengthens!

https://www.hfm.com/api/get-analysis...e5da3849c1a08c
The US Dollar continues to rise in value after obtaining further support from positive economic and employment data. However, the hawkish Federal Reserve continues to support the currency. On the other hand, the Great British Pound comes under significant strain. Why is the GBPUSD declining?
GBPUSD - Why is the GBPUSD Declining?
The GBPUSD is witnessing bullish price movement for three primary reasons. The first is the Federal Reserve’s Monetary Policy, the second is the positive US news releases from yesterday and the third is the votes from the Bank of England’s Monetary Policy Committee.

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Even though the Bank of England chose to keep interest rates unchanged at 4.75%, the number of votes to cut indicates dovishness in the upcoming months. Previously, traders were expecting the BoE to remain cautious due to inflation rising to 2.6% and positive employment data. In addition to this, the Retail Sales data from earlier this morning only rose 0.2%, lower than expectations adding pressure to GBP.
Investors also should note that the two currencies did not conflict and price action was driven by both an increasing USD and a declining GBP. The US Dollar rose in value against all currencies, except for the Swiss Franc, against which it saw a slight decline. The GBP fell against all currencies, except for the GBPJPY, which ended higher solely due to earlier gains.
US Monetary Policy and Macroeconomics
The bullish price movement seen within the US Dollar Index continues to partially be due to its hawkish monetary policy. Particularly, indications from Jerome Powell that the Fed will only cut on two occasions and the first cut will take place in May.
However, in addition to this the economic data from yesterday continues to illustrate a resilient and growing economy. This also supports the Fed’s approach to monetary policy and its efforts to push inflation back to the 2% target. The US GDP rose 3.1% over the past quarter beating expectations of 2.8%. The GDP rate of 3.1% is also higher than the first two quarters of 2024 (1.4% & 3.0%). In addition to this, the US Weekly Unemployment Claims fell from 242,000 to 220,000 and existing home sales rose to 4.15 million. Home sales in the latest month rose to an 8-month high.
For this reason, the US Dollar rose in value against most currencies throughout the day. Analysts believe the US Dollar will continue to perform well due to less frequent rate cuts and tariffs. The US Dollar Index trades 1.65% higher this week.
Bank of England Sees Increased Support for Rate Cuts!
The Bank of England kept interest rates unchanged as per market’s previous expectations. The decision is determined by a committee of nine members and at least five of them must vote for a cut for the central bank to proceed. Analysts anticipated only two members voting for a cut, but three did. This signals a dovish tone and increases the likelihood of earlier rate cuts in 2025.
The three members that voted for a rate cut were Dave Ramsden, Swati Dhingra, and Alan Taylor. Advocates for lower rates believe the current policy is too restrictive and risks pushing inflation well below the 2.0% target in the medium term. Meanwhile, supporters of keeping the current monetary policy argue that it's unclear if rising business costs will increase consumer prices, reduce jobs, or slow wage growth.
However, if markets continue to expect a more dovish Bank of England in 2025, the GBP could come under further pressure. In 2024, the GBP was the best performing currency after the US Dollar and outperformed the Euro, Yen and Swiss Franc. This was due to the Bank of England’s reluctance to adjust rates at a similar pace to other central banks.
GBPUSD - Technical Analysis
In terms of the price of the exchange, most analysts believe the GBPUSD will continue to decline so long as the Federal Reserve retains their hawkish tone. The exchange rate continues to form lower swing lows and lower highs. The price trades below most moving averages on the 2-hour timeframe and below the neutral level on oscillators. On the 5-minute timeframe, the price moves back towards the 200-bar SMA, but sell signals may materialise if the price falls back below 1.24894.

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Key Takeaways:

1. The US Dollar increases in value for a third consecutive day and increases its monthly rise to 2.32%.
2. The US Dollar Index was the best performing currency of Thursday’s session, along with the Swiss Franc.
3. US Gross Domestic Product rises to 3.1% beating economist’s expectations of 2.8%.
4. US Weekly Unemployment Claims read 220,000, 22,000 less than the previous week and lower than expectations.
5. The NASDAQ declines further and trades 5.00% lower than the previous lows.
6. The GBPUSD ends the day 0.56% lower and falls more than 1% after the Bank of England’s rate decision. Three Members of the BoE vote to cut interest rates.
7. The GBP was the worst performing currency of the day along with the Japanese Yen.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

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Date: 2nd January 2025.

The USD Retraces But Can The AUDUSD Correct To 0.62320?

https://www.hfm.com/api/get-analysis...68b63cc984379c
The AUDUSD trades at a 27-month low as the Australian Dollar struggled to maintain momentum in December and the Dollar has risen since the US elections. However, the Australian Dollar is increasing in value during this morning’s Asian Session due to positive Chinese Manufacturing data. Will the AUDUSD hold its bullish momentum to the mean (0.62340) of the most recent price range?
AUDUSD - The Australian Dollar continues to struggle for sustained momentum!
The primary reason for the increase in the Australian Dollar is the positive Manufacturing Data from China. The performance of China is known to be closely linked to the performance of Asian currencies such as the JPY but also the AUD and NZD. The Australian Dollar is the best performing currency of the day and is increasing in value against all currencies except against the JPY where it moves sideways.

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The US Dollar on the other hand is performing relatively poorly, and is retracing after yesterday’s gains. However, traders should note that the bearish price movement is relatively weak compared to the recent Dollar trend. The US Dollar Index rose in value for 4 consecutive weeks before retracing this morning. Therefore traders need to be cautious that the Dollar potentially may regain momentum. However, if the Dollar continues to decline a potential target may be seen at the average price of the previous range. The previous range formed between the 19th to the 30th December with an average price of 0.62320.
The US Dollar Index reached its highest level since November 6th, 2022
Experts anticipate that Trump will reinforce protectionist policies, potentially reigniting active trade wars as he has done in the past. He previously announced plans to raise import tariffs on goods from China, Mexico, and Canada, while excluding European imports. Shifts in foreign trade are also expected to influence the US Federal Reserve's rhetoric. The December median interest rate forecasts indicate only two 25 basis point cuts in 2025, with any easing of policy not expected to begin before June.
The hawkish Federal Reserve is able to support the US Dollar in the longer term and potentially tariffs may trigger a lower risk sentiment. The lower risk sentiment also may trigger a higher demand for the US Dollar. However, this would depend on the upcoming Trump policies.
In the short-term, the US Dollar will also be influenced by this afternoon’s US Weekly Unemployment Claims release and the Final Manufacturing PMI. However, higher volatility is not likely to return until tomorrow’s trading sessions.
AUDUSD - Technical Analysis
In terms of technical analysis, the price of the AUDUSD is trading within a retracement of the day’s impulse wave. However, the price continues to remain at a lower high and lower low. In addition to this, the AUDUSD is also trading below the main Moving Averages and below the neutral level on most oscillators. Therefore, if bullish momentum is regained, traders potentially may focus on a correction to 0.62320 at first. If the price rises above 0.62142, the price will see stronger signals indicating a correction to this level.

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Conclusion:

1. The US Dollar Index rose to its highest price since November 6th 2022 before the markets closed for New Years Day.
2. The Australian Dollar is the top-performing currency in this morning's Asian session, recovering from its decline in December.
3. Positive Chinese Manufacturing data boosts Asian currencies including the AUD, NZD
4. If the price rises above 0.62142, it will signal a stronger correction to this level.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 3rd January 2025.

NASDAQ Falls as Tesla Misses Delivery Targets: What’s Next for January?

https://www.hfm.com/api/get-analysis...01711cf9bd8c6c

The NASDAQ fell in value for a fifth consecutive day, declining during the US trading session. The index recorded gains during the morning session, but these were erased as US traders shorted the NASDAQ, resulting in a 0.17% decline by the end of the day. The NASDAQ trades at a 5% discount and found support at the previous support level. What can traders expect from the NASDAQ in January?

NASDAQ - Why did the NASDAQ Decline For A Fifth Day?
The main reason for the decline on Monday was Tesla stocks which fell more than 6.00% due to the company failing to meet delivery expectations. Investors had projected 510,000 vehicle deliveries for Tesla in the fourth quarter of 2024, with analysts emphasizing the importance of achieving at least 500,000. However, Tesla's final delivery count reached 495,570, falling short of both targets. Consequently, the stock dropped over 6.00%, adding pressure to the NASDAQ, where Tesla holds a 3.79% weight. Tesla is the NASDAQ’s 7th most influential stock.

In addition to this, investors also note that the weakness of the NASDAQ was also partially due to the lack of bullish momentum amongst stock which did increase in value. Of the most influential stocks, only 8 stocks rose in value with an average increase of 0.79%. The average decline was 1.15%.

The decline is also partially due to the rise in the US Dollar making the US stock market less attractive to foreign investors. As a result, the stock market can potentially come under further pressure taking into account the bullish Dollar, hawkish Federal Reserve and upcoming tariffs across multiple industries. According to the CME FedWatch Tool, there is a 50% chance that the Federal Reserve will not adjust interest rates until May 2025.


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Earnings Season
Given a hawkish Federal Reserve, a strong Dollar, and the potential for upcoming trade wars, a 5% dip from recent highs might appear modest for the NASDAQ. Traders should remember that during the last trade war triggered by Trump, the NASDAQ experienced a sharper decline of 16-17%. However, company earnings could be a lifeline for the NASDAQ if quarterly earnings reports read higher than previous expectations and guidance.

Earnings season will officially start on the 15th of January, however, for the technology sectors, earnings will gain momentum from the 21st onwards. On the 21st Netflix will release their quarterly earnings report for the 4th quarter, and on the 22nd Tesla. The two companies hold a weight of 6.21% between them.

NASDAQ - Technical Analysis
On Monday, the NASDAQ rose during the Asian and European Session. Buy signals were also backed by the VIX index and Bond Yields which were trading lower. However, the NASDAQ was and still is trading below the 75-bar EMA and 100-bar SMA. In addition to this, oscillators were also priced below the neutral level adding to the bearish bias. The bearish bias continues even as the NASDAQ increases during today’s Asian session. Traders should note that the price action can quickly change as the US session approaches.


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Wave analysis currently continues to show lower lows and lower highs. The current retracement measures 1.29% and retracements over the past days have on average measured 1.43%. The only concern for investors is the support level at $20,794.47 and if this afternoon’s ISM Manufacturing PMI may potentially trigger a different type of volatility. If not, indicators continue to point to a potential downward bias in the short-term. Sell signals are likely to intensify if the price falls below $20,967.30 and $20,902.50.

Summary:

1. The NASDAQ declines for a fifth consecutive day due to a bullish Dollar, hawkish Fed and Tesla’s miss.
2. Tesla misses its 4th quarter deliveries expectations triggering a 6% decline. All US Indices decline after the opening of the US trading session.
3. Tesla's final delivery count reached 495,570, falling short of all targets.
4. Earnings season kicks off on January 15, with tech sector momentum starting January 21, led by Netflix and Tesla.
5. NASDAQ’s bullish price movement forms a retracement similar to recent days. Traders focus on the US session and prices lower than $20,967.30.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 6th January 2025.

The NASDAQ Rebounds As Investors Get Ready For Earnings Season!

https://www.hfm.com/api/get-analysis...de1877f04a4387
The NASDAQ jumped more than 1.65% on Friday after 5 days of consecutive declines. The decline was primarily due to investors opting to take advantage of the discounted price ahead of this week’s earnings season. Earnings season is due to start this Friday with the banking sector. However, is there still downside risk to the NASDAQ’s bullish trend?

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NASDAQ - Bullish Signals With The Risk of Corrections!
Due to the NASDAQ’s considerable rise on Friday, the index is obtaining bullish signals from technical indicators and price action, although other factors continue to signal risk of a potential further downslide. With inflation on the rise again and economic data beating expectations, the hawkishness of the Federal Reserve is likely to remain.
On Thursday and Friday, the US Final Manufacturing PMI, ISM PMI and ISM Manufacturing Prices all rose above expectations. The ISM Manufacturing PMI rose from 48.4 to 49.3 and the Manufacturing Prices Index from 50.3 to 52.5. Friday’s strong economic data did trigger a 40-minute decline, but the bullish trend continued thereafter. Nonetheless, the positive economic data adds to the Federal Reserve’s current bullish tone. A hawkish Fed in the long-term can dim upward price movement or even trigger a larger correction.
In addition to this, President-elect Trump will take office on January 20th and most political experts predict his administration will pursue tariffs on imports. Previously, this triggered a lower sentiment towards the stock market and a strong US Dollar. The US Dollar over the past 2 months has appreciated by almost 5.00%, but stocks have yet to experience a significant, lasting decline. A strong factor for the performance in January and February will be earnings season.
Traders will be monitoring whether institutions increase their exposure to the NASDAQ as earnings season approaches. However, the market’s decision will also depend on the upcoming employment data. The US is set to release its JOLTS Job Vacancies tomorrow, ADP Employment Change on Wednesday, NFP Employment Change and Unemployment Rate on Friday. Analysts expect the US Unemployment Rate to remain at 4.2%. If the employment data reads higher than expectations, investors may adopt a more hawkish stance on monetary policy. As a result, the positive data could have a negative short-term effect on the NASDAQ.
European stocks trade higher as the European Market opens, while Asian stocks decline. However, both the VIX Index and US bond Yields trade higher. If the VIX and Bond Yields continue to rise, traders may become cautious of further speculating the impulse wave in the short term.
NASDAQ - Earnings Season
As mentioned above, earnings season will start on NFP Friday (Friday 10th), but none of the NASDAQ components will be included. Nonetheless, the quarterly earnings reports on Friday will provide either a stronger or weaker sentiment towards the US stock market and therefore will have a ripple effect on the technology sector.
The first NASDAQ companies which analysts will be following are Netflix and Tesla. Analysts expect revenue for Netflix to increase above $10 billion, but for their earnings per share to fall from $5.40 to $4.22. However, for Tesla, analysts expect both revenue and earnings per share to increase, despite the company failing to meet its delivery targets. Over the past 12 months, Tesla has risen by 70% and Netflix by 82%.
NASDAQ - Technical Analysis
The price of the NASDAQ is trading above the 75-bar EMA and attempting to cross above the 100-bar SMA. On the 2-hour chart, the index is also trading in the buy zone of most oscillators. The NASDAQ also starts this week with a bullish price gap measuring 0.23%. Currently, the price movement indicates investors are increasing exposure as we approach the start of earnings season. However, this will also depend on the employment data throughout the week.


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Key Takeaways:

1. Price movement indicates investors are increasing their exposure to the NASDAQ as earnings season approaches.
2. Key risks remain if employment data beat expectations, which could likely trigger a prolonged hawkish stance from the Federal Reserve.
3. The performance of the stock market will also depend on the potential for upcoming trade wars. Donald Trump is set to take office on January 20th.
4. The price of the NASDAQ is trading above the 75-bar EMA and attempting to cross above the 100-bar SMA. Today’s trading starts with a bullish price gap.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 7th January 2025.

European Stocks Dip, Yen Hits Lows, Bitcoin Surges Over $102K Amid Market Shifts.

https://www.hfm.com/api/get-analysis...3d30574fe8be0f
Asia & European Sessions:

1. European stocks are set to open lower, with Euro Stoxx 50 futures down 0.5%, reflecting caution ahead of key economic releases, including eurozone inflation and US job openings data.
2. US futures also edged lower, contrasting with modest gains in Asian markets driven by strength in chip-related stocks. The surge in semiconductor shares followed Nvidia CEO Jensen Huang's announcement of new products, reigniting optimism around AI demand.
3. Tencent shares plunged by as much as 8%, while battery maker Contemporary Amperex Technology dropped over 6% after being labeled a military-linked entity by the Pentagon.
4. Market sentiment remains clouded by geopolitical concerns. Traders are digesting rising trade tensions after Donald Trump refuted reports suggesting he would ease tariffs if he returns to the White House. Washington's decision to blacklist several Chinese companies, including tech giant Tencent Holdings, has further strained U.S.-China relations, adding pressure on China’s already slowing economy.
5. Japanese Finance Minister Katsunobu Kato issued a warning about "excessive moves" in the yen, suggesting potential intervention to stabilize the currency. The Yen slumped to its weakest level since July, underperforming all major currencies, as Japanese retail investor outflows and the Tokyo benchmark fixing drove the decline. Meanwhile, the selling through the Nippon Individual Savings Account (NISA) and trend-following dollar buying could be a key factors behind the Yen’s drop.
6. Justin Trudeau has announced he will resign as Canada's prime minister and as leader of the Liberal Party of Canada.

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Financial Markets Performance:

1. The US Dollar dip to 107.85 from 109.60 highs, after Trump’s denial.
2. The EURUSD rebounded to 1.0413, the GBPUSD rallied to 1.2550.
3. The USDJPY fell to 158.42 against the dollar before paring losses to 157.73 by mid-afternoon in Tokyo. The Yen’s performance could be further impacted by US data, particularly Friday’s jobs report. A stronger-than-expected figure may push back expectations for US rate cuts, potentially driving the USDJPY pair to 159.
4. Oil prices steadied after dipping for the first time in 6 sessions, with technical indicators suggesting the recent rally may have been overextended.
5. Bitcoin surpassed the $102,600 mark, signaling growing confidence in digital assets. A CoinShares report highlighted over $500 million in Bitcoin ETF investments in the year’s first three trading days. MicroStrategy added to the bullish momentum with its ninth consecutive Bitcoin purchase, acquiring another $100 million. The company now holds nearly $45 billion in Bitcoin, and its stock has surged alongside the crypto's rebound — potentially paving the way for further share issuances to fund additional Bitcoin buys. The macroeconomic backdrop remains a key driver for crypto markets. Rumors of a rollback on Trump-era tariffs have caused the USD to weaken, adding volatility to global markets. Bitcoin’s recent price moves reflect this, with traders watching the dollar index closely for cues.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 8th January 2025.

Global Market Update: Inflation Concerns Weigh on Stocks, Bitcoin Drops Below $100K, Gold Holds Steady.

https://www.hfm.com/api/get-analysis...24462fdb2f2111

Asia & European Sessions:

 

1. European stocks saw an extended downturn in Asia and the US, driven by mounting inflation worries that triggered a selloff in Treasury markets.
2. Fed funds futures took a hit after the stronger than expected JOLTS report, and the ISM services data that showed a pick up in activity, a solid labor market, and an acceleration in prices paid, all supporting a more cautious rate cut stance. Indeed, the implied January contract now shows just -1.7 bps in cuts this month. Earlier bets on a reduction by March have been abandoned, with rate cuts now anticipated in the latter half of the year.
3. German manufacturing orders plunged -5.4% m/m in November, after already falling -1.5% m/m in the previous month. The correction was much sharper than anticipated and left the annual rate back in negative territory. There is some life in the manufacturing sector yet, even though the volatile headline numbers and negative survey readings flag ongoing weakness across the sector.
4. Asian stocks saw significant losses as the MSCI index of regional equities recorded its largest single-day decline in over two weeks, erasing gains made on Tuesday. China’s primary stock index briefly dipped to its lowest point since September, reflecting investor anxiety over a potential increase in US tariffs.
5. Investor sentiment across Asia remains dampened by ongoing economic uncertainty. In China, concerns about a deflationary spiral are growing, even as yield spreads in credit markets reach their lowest levels since the global financial crisis. This has challenged investor appetite amid a wave of debt issuances worldwide.
6. The stronger than expected ISM services and JOLTS data weighed on Treasuries as they further eroded Fed rate cut risks, and the subsequent climb in yields and more hawkish Fed outlook hit stocks.
7. The major indexes finished measurably weaker on the day with the NASDAQ dropping -1.89%, while the S&P 500 was off -1.11% and the Dow slipped -0.42%.
8. Nvidia opened with a better than 2% gain to an intraday record peak of $153 after bullish news from the CES trade show, but the stock reversed in the afternoon and plunged -6% to $140.14 at the close

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Financial Markets Performance:

1. The US Dollar rallied to 108.65 with next immediate resistance at 108.85
2. The EURUSD dipped further to 1.0325, while the GBPUSD is lower to 1.2445.
3. The USDJPY is at 158.23 as the Yen remains under pressure.
4. Gold is steady at $2650. Haven flows and central bank purchases helped to push gold to record highs in 2024 and central bank buying is helping to keep the price at high levels. China's central bank resumed gold purchases in November, and data released today, show that purchases continued in December.
5. Oil rose for a 2nd consecutive day to $75 after industry reports indicated another drawdown in US inventories.
6. Bitcoin fell more than 5%, slipping to $96,200 after the $100,000 milestone. The drop came in response to positive US economic data, which pointed to a resilient economy and reduced the likelihood of further rate cuts by the Fed.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 9th January 2025.

FOMC Minutes Signal Slower Rate Cuts, UK Borrowing Costs Surge, & Global Market Update.

https://www.hfm.com/api/get-analysis...4cc2a1b2d269dc
Asia & European Sessions:

1. The FOMC minutes showed that the Committee expected to be slowing the pace of rate cuts after its decision to trim rates another -25 bps. Following an unexpected emergency rate cut in September, despite there being no immediate crisis, the Fed has since shifted towards a more measured approach, indicating that a slower pace of rate reductions would be “appropriate” by December. The core strategy remains consistent: to bring inflation down. While inflation-related discussions did touch on concerns over US President-elect Trump’s trade taxes and deportation plans, these issues were not the main focus of the inflation debate.
2. The Greenback was firmer overnight on reports Trump would declare a state of emergency to get his tariff plans through. It dipped on the ADP report but bounced on the tight jobless claims data. The index had firmed yesterday after Trump denied reports he would soften his tariff plans, and after the strength in the JOLTS numbers Tuesday. Solid 30-year auction results also supported in the afternoon.
3. China's inflation data for December showed largely stable consumer prices, with food prices stabilizing (a notable factor given food’s significant weight in the consumer basket) and only modest increases in non-food prices, despite efforts to boost domestic consumption. Producer prices, however, continue to struggle with deflation.
4. In the UK, the BRC shop price index fell more sharply than anticipated, with a significant drop in non-food item prices, likely influenced by Black Friday discounts. When combined with sales data, this suggests that UK consumers increased their real-term spending in the fourth quarter, driven by lower prices and promotions.
5. Gilts remain under pressure in early trade, with the UK 10-year rate up 2.1 bp at 4.81%. UK 10-year borrowing costs surged to their highest point since the global financial crisis, while the Pound plummeted, as a deepening bond sell-off raised concerns over the Labour government’s ability to meet its self-imposed budget targets. So far in 2025, borrowing costs in the UK have increased at a faster pace than in other major economies, driven by investor fears over the government’s large borrowing requirements and the mounting risk of stagflation.
6. Eurozone industrial production rose 1.5% m/m in November. Germany's jobless rate still is very low by European standards, but the overall picture remains pretty gloomy, with political uncertainty and the threat of Trump tariffs not helping.

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Financial Markets Performance:

1. European stock markets are mixed, with the FTSE100 outperforming and up 0.4%, while the DAX is down -0.2%, after a largely weaker close across Asia. Hang Seng and CSI 300 lost -0.3%, after Chinese inflation numbers.
2. The USDIndex is up 0.2% and at 109.17, while Sterling continues to sell off. GBPUSD slumped below 1.2300 on budget angst and as the 10-year Gilt spiked.
3. EURUSD slumped to 1.0273 after weak Eurozone data.
4. USOIL is slightly down on the day and at USD 73.24 per barrel.
5. Gold is unchanged at USD 2662.44 per ounce.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 10th January 2025.th

Why is the British Pound Declining?

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The Great British Pound is the worst performing currency of 2025 so far after witnessing sharp declines for 3 consecutive days. The decline is largely being triggered by the bond selloff, lack of business confidence due to the UK Autumn budget and political uncertainty. Will the trend continue?

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The GBP Index Declines 2% In 2025! Why Is The Pound Dropping?
The Great British Pound is the worst performing currency of the week and of the year so far. Below you can see a table showing the Pound’s performance in January 2025 so far.
GBPUSD -2.25%
EURGBP +1.69%
GBPJPY -1.44%
GBPCHF -1.42%
GBPAUD -1.91%
GBPCAD -2.00%
A key reason for the GBP’s decline is the latest labor budget, which is driving a selloff in UK bonds. Bonds across the global market are declining, including in the US and Germany. However, the global decline is mainly due to monetary policy. The decline in UK bond yields is due to concerns regarding the UK budget, higher costs for business and investor confidence. As a result, investors are selling UK bonds, but also reducing their exposure to the Pound.
Bond Selloff and Rising Yields: Higher bond yields can sometimes strengthen a currency by attracting increased investor demand. However, this effect is unlikely when rising yields result from a bond selloff driven by declining investor confidence.
The UK 30-Year Bond Yields are at their highest level since 1998 and the 10-Year Bond Yields are up to the highest level since the banking crisis of 2008. Investors’ concerns are that the higher costs for business will be passed onto consumers, triggering higher stickier inflation. As a result, the Bank of England will struggle to reduce the cost of borrowing in 2025 and foreign investors will become more cautious of operations in the UK.
The short-term impact is that the UK Chancellor may struggle to meet her fiscal rules. Her budget margin of £9.9bn to avoid overshooting borrowing has likely shrunk to about £1 billion due to market shifts, even before the OBR updates its forecasts. This uncertainty may force the Treasury to cut future spending plans, but the full picture won’t emerge until the OBR's March forecast. According to reports, the UK Chancellor cannot risk higher increases in taxes and will be forced to cut public spending.
The GBPUSD Falls To A 60-Week Low!
The GBP is struggling against all currencies, but the sharpest decline can be seen against the USD. The GBP’s decline is partially due to the incoming president, Donald Trump, who is expected to introduce Dollar-supporting measures, but also potentially impose tariffs on the UK.

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The new White House administration is likely to impose new tariffs on imports from China, Canada, and Mexico. This is likely to potentially disrupt supply chains and prompt the Federal Reserve to adopt tighter monetary policy, thereby strengthening the national currency. Some experts believe the UK will face tariffs or be pressured to adopt more pro-American economic policies. This is also something the EU will likely experience. In addition to this, reports suggest that the UK Prime Minister, Keir Starmer, and Trump supporters are not on good terms, nor agree on much including on Geo-politics.
Therefore, the decline is also related to concerns the UK may be put into a difficult position by the new US administration. According to analysts, Dollar strength is likely to continue throughout the year due to the new administration’s measures, but also due to a hawkish Federal Reserve. In the latest FOMC meeting minutes, the committee stated it expects interest rates to decline at a slower pace. The Federal Reserve is likely to only cut 0.50% in 2025 and may not cut until May or June.
Liz Truss 2022 Or James Callaghan 1976?
Is this the first Pound crisis? The GBP has experienced many "sterling crises” in the past. For example, Black Wednesday from 1992 and after Brexit in 2016. However, there have been similar crises in the past which are very similar to the current situation. For example, the Liz Truss Budget from 2022 which saw the GBP decline more than 23%. During the Sterling Crisis of 1976 the GBPUSD fell from 2.0231 to 1.5669.
Both sterling crises were due to the budget, inflation and rising bond yields. Today’s issues for the GBP and UK are very similar, however, the performance of the GBP will depend on if the new SI contributions triggers lower economic activity, inflation and if the Federal Reserve indeed avoids cutting interest rates in the near future. If inflation rises it will dampen consumer demand and the Bank of England will be forced to pause any rate adjustments. As a result, the economy may contract or stall further pressuring the GBP.
However, this cannot yet be certain. KPMG experts anticipate accelerated economic growth this year, supported by monetary policy and increased government spending. They project GDP to rise to 1.7%, more than doubling last year’s 0.8%. This growth, according to their estimates, will be driven by a recovery in consumer spending, expected to increase by 1.8% compared to 1.0% last year. In addition to this, if the Federal Reserve unexpectedly opts for more frequent rate cuts, the GBP and EUR are likely to benefit.
When monitoring the price movement and patterns which can be seen in the exchange rate, the decline looks similar to the price movement seen in 2022, during the Truss reign. The price has now fallen below the support level from April 2024. The next support levels can be seen at 1.20391 and 1.17992. Technical analysis for the GBP can also be viewed in HFM’s latest Live Trading Session.

Key Takeaways:

1. The Great British Pound is the worst performing currency of the year so far, having declined by more than 2.00%.
2. A key reason for the GBP’s decline is the latest labor budget, which is driving a selloff in UK bonds.
3. UK 30-year bond yields are at their highest since 1998, while 10-year yields have reached levels last seen during the 2008 banking crisis.
4. Investors reduce exposure to the GBP as the US edges closer to a new president and pro-Dollar supportive measures.
5. The UK labour government will not reconsider higher taxes but may be forced to reduce public spending.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 13th January 2025.

Global Market Update: Asian Stocks Fall, Pound Weakens,Oil Surges Amid Fed and Geopolitical Shifts.


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Asia & European Sessions:

1. Asian markets tumbled alongside European and US equity futures as investors scaled back expectations of near-term interest rate cuts by the Fed, following stronger-than-expected US payroll data.
2. Bank of America has revised its outlook, no longer anticipating two 25 bps rate cuts this year and warning that the Fed’s next move could be a hike. Goldman Sachs also adjusted its forecast, expecting two rate cuts instead of three for 2025.
3. Chinese equities also slid further despite data showing record exports for 2024, as concerns linger over potential higher US tariffs once President-elect Donald Trump takes office.
4. The Pound extended its decline from last week, hitting a multi-month low.
5. Oil prices surged to a 4-month high due to fresh US sanctions on Russia. These measures included restrictions on two major oil exporters, insurance companies, and over 150 oil tankers.
6. China Intervenes to support the Yuan: China intensified its efforts to stabilize the yuan after the currency neared record lows in offshore trading. The People’s Bank of China, along with other regulators, vowed to strengthen oversight of the foreign exchange market, crack down on disruptive activities, and prevent further declines in the yuan.
7. Geopolitical tension continues as Justin Trudeau stated that Canada is ready to respond with counter-tariffs against the US if President-elect Donald Trump follows through on his threat to begin a trade war in North America.

Canada is the largest buyer of US-made products, purchasing approximately $320 billion worth in the first 11 months of last year. He emphasized that Canada is the top export partner for 35 US states, and any trade restrictions would ultimately hurt American businesses and workers. Recalling the 2018 tariffs on steel and aluminum under the Trump administration, Trudeau pointed out that Canada had responded by imposing duties on various US goods, including appliances, bourbon whiskey, and boats. He reiterated that his government is ready to take similar action if necessary.

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Financial Markets Performance:

1. The USDIndex has inched up to 109.84, despite the fact that the Yen strengthened. EURUSD and cable remain under pressure.
2. The Pound fell as much as 0.7% to $1.2126, marking its lowest level since November 2023, amid stagflation concerns and budget jitters. This extended a 1.7% drop from the previous week.

“A slowing economy and widening deficits in both the current account and fiscal balances are weighing on the pound,” said Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp.

1. Oil markets were in focus as UKOIL rose above $81 per barrel during Asian trading hours & USOIL to $77.55 driven by US sanctions targeting Russia’s energy sector.
2. Gold is steady at $2686.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 14th January 2025.

Asia & European Sessions: Market Sentiment Shifts on Tariff Talks and Inflation Data Focus.


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Asia & European Sessions:

1. Bearish momentum after Friday's meltdown, rising oil prices, technicals, and apprehension over upcoming inflation reports left the market heavy and buyers scarce.
2. Market sentiment got a boost by a Bloomberg source story suggesting that President-elect Trump's team considers a gradual fading in of tariffs. The report boosted stock market sentiment in Asia and Europe.
3. Trump team studies gradual tariff hikes . Bloomberg cited "people familiar with the matter" as saying that "members of President-elect Donald Trump's incoming economic team are discussing slowly ramping up tariffs month by month, a gradual approach aimed at boosting negotiating leverage while helping avoid a spike in inflation". "One idea involves a schedule of graduated tariffs increasing by about 2-5% a month, and would rely on executive authorities under the International Emergency Economic Powers Act." The sources said the proposal is still in its early stages and has not yet been presented to Trump.
4. Bond yields finished marginally off their highs on possibility of gradual tariffs. The curve steepened slightly to 39 bps from 37.5 bps Friday and is out from 31.7 bps at the start of the month.
5. Chinese shares rallied as much as PBoC to enhance policy tools, which allow institutional investors to access central bank funding for buying stocks. Coupled with a jump in new yuan loans that helped the Hang Seng to close 1.8% higher, while the CSI300 jumped 2.6%. Eurozone stock markets are also finding buyers, and the DAX is up 0.6%. The FTSE100 is underperforming, but yields are down also in the UK.
6. US inflation is the focal point this week with key data due out, and it doesn't look pretty. Attention is on CPI (Wednesday) where we are forecasting monthly increases of 0.3% for headline and core metrics, with the y/y measures at 2.8% for the headline and 3.3% for the core. However, also due are today's report from the NY Fed on 1-year inflation expectations, PPI today, and trade prices (Thursday), along with the price numbers in the Empire State (Wednesday) and Philly Fed (Thursday) indexes.

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Financial Markets Performance:

1. The USDIndex hit a session low of 109.33.
2. EURCHF presents a rectangle identified at 14-Jan-04:00. This pattern is still in the process of forming. Possible bullish price movement towards the resistance 0.9437 within the next 3 days. Supported by Upward sloping Moving Average
3. Oil prices are slightly lower, and the USOIL contract is at USD 78.65 per barrel.
4. Gold is a tad higher at $2670.1 per ounce.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 17th January 2025.

Last Trading day under Biden Administration.

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Asia & European Sessions:

1. Yields remain richer after dovish comments from Fed Governor Waller. His comments that the FOMC could cut rates in 1H, and would not rule out March added to the bullish enthusiasm from the cooling in CPI and PPI. Additionally, thoughtful and tempered remarks from Treasury Secretary nominee Bessent did not ring any alarm bells.
2. Wall Street ended lower on profit taking following yesterday's big gains, failing to get any further mileage out of the rally in Treasuries. The NASDAQ slid -0.89%. The S&P500 dipped -0.21%, and the Dow was down -0.16%.
3. Pound plummeted after UK December Retail Sales. UK December retail sales contracted -0.3% m/m in the overall measure and -0.6% m/m excluding fuel. A disappointing report, especially as November readings were revised down from 0.2% m/m to 0.1% m/m in the overall number and to 0.1% m/m from 0.3% m/m in the ex-fuel report. There has been somewhat conflicting stories about retail sales developments ahead of Christmas, but these numbers confirm that consumption remains depressed, which adds to the disappointing monthly GDP reading this week. With inflation coming in lower than anticipated, the data will back expectations for another rate cut from the BoE at the next meeting.
4. The BOJ is expected to raise interest rates next week, barring any significant market disruptions as US President-elect Donald Trump takes office. Overnight index swaps on Friday indicated a 99% probability of a BOJ rate hike at its January 23-24 meeting, up from 71% on Wednesday. Momentum increased on Thursday following a Bloomberg report suggesting central bank officials see a strong likelihood of a rate hike unless Trump's inauguration introduces significant surprises.

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Financial Markets Performance:

1. The USDIndex ended weaker too at 108.974, dipping from the day's high of 109.384.
2. GBPUSD dipped to 1.2159 after data, before correcting back to 1.2197 due to oversold conditions.
3. Yen remains supported by hawkish BoJ bets and USDJPY has corrected to 154.95 as markets weigh the chances of a rate hike next week.
4. USOil was well supported above $77.80, amid weaker than expected US inflation boosted dovish Fed bets, demand expectations and ahead of Trump administration. USOIL & UKOIL continued to trade near 6-months highs, as traders weigh potential supply disruptions and the ongoing decline in US stockpiles. OPEC meanwhile is sticking with a demand outlook that expects a rise of 1.43 million barrels per day next year, which reflects steady growth. Confirmation of a ceasefire and hostage deal between Israel and Hamas may have helped prices to ease slightly.
5. Gold steadied above $2700 level.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 20th January 2025.

The NASDAQ Rises As Trump Inauguration Edges Closer!

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US indices increased in value for the first time after struggling for 5 consecutive weeks. Of the main US indices the NASDAQ witnessed the strongest gains (4.12%). Risk indicators point to a higher risk appetite under the new US President, Donald Trump. President Trump's inauguration will take place this afternoon and has promised to sign over 100 consecutive orders within his first week.
NASDAQ - Higher Investor Confidence!
NASDAQ traders begin to stomach less frequent interest rate adjustments, the market turns its attention to earnings and Trump’s presidency. Investors are becoming more bullish under expectations that Trump will apply policies to support the US economy and entice further investment into the US stock market. A "risk-on" sentiment is evident in today's sessions, reflected in risk indicators like the VIX, High-Low Index, and Bond yields.

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Investors this week will concentrate on two factors. The first factor is Trump’s consecutive orders which he has advised will be signed within his first week. Investors will closely monitor how and if these policies influence the US economy and stocks. The second factor is earnings season, which will start to gain momentum this week. Tomorrow, Netflix will release its quarterly earnings report after the market closes.
Netflix is the NASDAQ’s 10th most influential company and 11th most impactful stock. Analysts expect the company’s earnings per share to drop from $5.40 to $4.21, but for Revenue to rise to $10.11 Billion. If Netflix is able to beat the earnings per share and revenue expectations, fundamental elections would indicate a rise in the price. Over the past 12 months the price has risen 76%. A further increase would further support the NASDAQ.
Thereafter, investors will turn their attention to Intuitive Surgical’s earnings report. Currently, investors believe the company’s earnings per share and revenue will rise compared to the previous quarter. Intuitive’s stock has risen by more than 9% in the past week alone indicating that investors believe the company will continue to beat earnings expectations. The company has beat expectations over the past 12-months.
How are Markets Reacting to Trump's inauguration?
Trump pledged to issue executive orders aimed at advancing artificial intelligence programs and establishing the Department of Government Efficiency (Doge). Analysts expect these two alone to support US stocks. However, investors are not yet certain to what extent upcoming tariffs will pressure the NASDAQ and stocks. During the previous trade wars, the NASDAQ fell by 25% over a period of 4-months.
Traders also should note that the NASDAQ rose in the 6-weeks after Trump won the elections. Over the past week, the VIX index fell by more than 12% indicating that the market believes US stocks will perform well under a Trump presidency. Simultaneously, US Bond yields have fallen from 4.80% to 4.58% which is known to positively influence the US stock market. Both the VIX and lower bond yields indicate higher investor confidence as Trump advises that policies will prompt more employment, US made products and more pro-US policies.
NASDAQ - Technical Analysis
The price of the NASDAQ trades above the 200-bar Moving Average on a 5-minute Chart indicating bullish price movement. Moving Averages have also crossed over upwards and the price trades above the VWAP indicating that the asset is maintaining its bullish momentum. Price action is also forming clear higher highs and higher lows, but investors will be cautious if the price does not find resistance at the $21,637 resistance level. In order to break above this level, investors will be hoping for positive earnings data from Netflix and Intuitive.

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Key Takeaways:

1. President Trump's inauguration will take place this afternoon with promise to sign over 100 consecutive orders within his first week.
2. US indices rise after 5 weeks of declines, with the NASDAQ leading at 4.12%.
3. Trump pledged to issue executive orders aimed at advancing artificial intelligence programs and establishing the Department of Government Efficiency.
4. Analysts expect Netflix earnings per share to drop from $5.40 to $4.21, but for Revenue to rise to $10.11 Billion.
5. Investors are becoming more bullish under expectations that President Trump will apply policies to support the US economy and entice further investment into the US stock market.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 21st January 2025.

Gold Surges Past Key Resistance Level, Undeterred by Looming Tariffs.

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Gold prices have risen to their highest level since November 6th, nearing a full correction from the post-election decline. In recent months, analysts have made clear predictions regarding the price of Gold rising to $3,000 in the first half of 2025. This prediction took a hit after the US elections triggered a 6.50% rise in the US Dollar. Is a $3,000 target possible?
How Does Trump Influence Gold?
The focus of the market over the past week has been the influence of a Trump Presidency on tradable assets. So far in January 2025, the price of gold has risen by more than 4.00%. This suggests that investors are confident Trump will not negatively impact gold in the medium to long term. However, investors are also considering the possibility of higher import duties on nearly all goods entering the United States, particularly from Canada, Mexico, and China.

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These measures could disrupt global supply chains if these countries choose to retaliate. As a result, the Federal Reserve may cut less in 2025 and the US Dollar may increase further. This is the market’s main concern and could potentially pressure Gold prices lower. In 2018, during the previous “trade wars”, Gold prices fell for 6-consecutive months. However, many economists believe the Federal Reserve will be forced into cutting on 3 occasions. If this does transpire, the price of Gold will be supported further.
Trump did not give any concrete signals on tariffs during his speech. The Republican administration seems likely to focus on targeted tariff increases, particularly on critical imports such as electric vehicles. Tesla Stocks are already trading 0.50% higher before the market opens.
UCFTC Gold Report And Influential Factors
The US Commodities Future Trading Commission also confirms the increase in demand via order flow analysis. The Commission’s data shows net speculative positions rose to 279.4K from 254.9K last week. Buyers have been actively forming positions, with their balance reaching 221.6K compared to 9.1K for sellers. Last week, buyers added 14.9K contracts, while sellers reduced theirs by 3.1K, reflecting strong confidence in the continued upward trend of XAU/USD.
When monitoring external factors and its influence on the price of Gold, traders will most likely continue to monitor Bond Yields, Earnings Reports and the US Dollar. Currently, lower bond yields are supporting Gold prices but this is something investors will need to continue monitoring. Gold prices may also potentially benefit from weaker earnings data to a certain extent. The most volatile day this week will most likely be on Friday as the Bank of Japan confirms its Interest rate decision and global economies release their PMI reports.
Gold’s Performance - Technical Analysis.
The price of Gold this morning is trading 0.75% higher than its open price. The retracement seen during the previous week was weaker than the average retracement size seen over the past 30-days indicating the momentum of the bullish price movement. The average bullish impulse wave measures 2.75% and the current impulse wave reads 1.49%. Therefore, if the asset was to continue similar price movements, the price potentially could rise to $2,763. However, this would depend on how upcoming events influence the price.

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Currently, technical analysis is providing a bullish bias as the asset breaks through the resistance level seen on a daily timeframe. In addition to this, the price trades above all Moving Averages and Cumulative Delta Statistics show higher volume in favour of buy orders. For this reason, the asset is witnessing bullish signals. However, if the price declines or retraces, traders should be cautious, as the bullish trend may regain momentum when the price approaches the 200-Period Moving Average on the 5-minute timeframe.

Key Takeaways:

1. Gold prices have risen to their highest level since November 6th.
2. Last week, buyers added 14.9K contracts, while sellers reduced theirs by 3.1K, reflecting strong confidence in the continued upward trend of XAU/USD.
3. Currently, technical analysis is providing a bullish bias as the asset breaks through the resistance level seen on Gold’s daily timeframe
4. Economists believe the Federal Reserve will be forced into cutting on 3 occasions.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 22nd January 2025.

Netflix Earnings Surge Driving the NASDAQ to Monthly Highs!

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The NASDAQ increases in value for a fourth consecutive day, gaining momentum after Netflix stocks rise more than 15%. Earnings reports are gaining speed for the technology sector, but why has Netflix stocks seen such a high and sudden rise in demand?
Netflix Stocks Increase 15% Supporting the NASDAQ!
Netflix stocks have been one of the best-performing stocks within the NASDAQ, rising more than 79% in 12 months. However, even for Netflix, a 15% rise in less than 24 hours is considered substantial. The quarterly earnings report was made public by Netflix after the market closed on Tuesday. The earnings report confirmed the following:

1. Netflix beat their earnings per share expectations - $4.27 reported vs $4.21 expectations.
2. Netflix’s revenue surpasses the previous quarter - $10.25 billion this quarter vs $9.82 billion in the previous quarter.
3. The online streaming company confirms projects to expand into live sport and event streaming will proceed. In addition to this, the company’s forward guidance for 2025 remains positive.

Netflix is the 10th most influential company for the NASDAQ meaning the positive earnings data and bullish price movement supports the overall price of the NASDAQ. In addition to this, the positive earnings improve the sentiment towards the entire US technology sector. Investors will now turn their attention to the quarterly earnings report for Intuitive Surgical. Intuitive Surgical stocks on Tuesday rose 1.94%.
How is the Economy And Politics Affecting the NASDAQ?

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The US stock market is witnessing an upward correction after struggling in the last weeks of 2024. The bullish price movement is a result of a sharp decline in bond yields, the new US administration and earnings season. Investors remain relieved that bond yields have fallen back down from the 5.00% level. If bond yields continue to decline further, particularly below 4.50%, the move would be deemed as positive for the US stock market.
President Trump took office on Monday and so far the pro-US rhetoric from the President, Vice President and Secretary of State continues to support the stock market. So far, the main concern is how upcoming tariffs can negatively affect inflation and growth. However, some economists advise tariffs will become the “norm” and may have a lesser effect compared to 2018. However, this is something traders will continue to evaluate and monitor.
The VIX this morning fell 0.83% lower and trades more than 5.70% lower over a 7-days. The lower VIX indicates a higher risk appetite towards the stock market. If the VIX continues to decline a strong buy indication may materialize.
On the most influential stocks for the NASDAQ, 82% rose in value on Tuesday. However, Apple stocks, the most impactful stock, fell 3.19% due to poor sell data. If Apple stocks continue to decline, the NASDAQ’s upward trend may come under strain. In the meantime, investors over the next week will continue to monitor upcoming earnings reports.
NASDAQ - Technical Analysis
The price of the index is trading significantly higher than all Moving Averages on a 2-hour timeframe and relatively high on oscillators. These factors indicate that buyers are controlling the order book. However, price action also confirms the latest impulse wave measures 3.43% which is normally the point at which the index retraces. This is something that investors may also consider.
The retracement potentially also may be triggered by Netflix buyers quickly selling to cash in profit after the sudden 15% bullish surge. If a retracement does indeed form, price action and the 75-period EMA indicates that the pullback may drop as low as $21,391.30.

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Key Takeaways:

1. The NASDAQ increases in value for a fourth consecutive day, but price action signals a possible retracement before continuing its bullish trend.
2. Netflix stocks increase more than 15% due to strong earnings data.
3. Netflix beat earnings and revenue expectations by 1.39% and confirmed projects to add live sports streaming to its platforms.
4. The VIX trades more than 5.70% lower over a 7-days and US Bond Yields remain at recent lows.
5. On the most influential stocks for the NASDAQ, 82% rose in value on Tuesday.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 23rd January 2025.

How Low Can Oil Prices Fall After Renewed Downward Pressure?

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Since Donald Trump became President of the US, Crude Oil prices have fallen 3.70% retracing back from the 27-week high. Analysts still believe the price of oil per barrel will fall under the Trump presidency, as per previous statements. President Trump himself previously stated he wants oil priced closer to $45 per barrel. However, how long can oil prices fall and how quickly?
What’s Driving Oil Prices Lower?

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Investors are closely watching the next steps of U.S. President Donald Trump’s administration. Yesterday, Trump announced plans to impose a 10% tariff on all Chinese exports, scaling back from the 100% tariff he promised during his campaign. This news has reassured investors, but experts caution that this move could be just the beginning. Over time, the U.S. may increase pressure on its top economic rival, potentially slowing the Chinese economy and reducing its energy demand.
China is currently the largest importer of Crude Oil followed by the US, India and Japan. Therefore, a poorer economic outlook for China can pressure oil prices in 2025. The performance of the Chinese economy will also depend on the 10% tariffs and if these will indeed rise over time.
The US President is also attempting to create an imbalance between supply and demand in order to pressure prices lower. On the President's first day he launched significant changes to the US’s energy policy, reversing restrictions on coastal oil field development imposed by the former President. Trump also advocated for boosting oil production at existing fields and declared a national energy emergency, aiming to attract investment in the mining sector and bolster the US oil reserves. If Trump is successfully able to considerably increase supply, the price of Crude Oil is likely to come under pressure. Only if demand equally improves will supply-demand imbalances be avoided.
Meanwhile, a sharp drop in oil prices is being mitigated by poor weather conditions along the Gulf Coast, which could disrupt production in key high oil-producing countries. Although, this is not likely to continue in the medium to long term. The Middle East and high-producing countries in recent years have aimed to keep oil prices between $70-$80 per barrel. Therefore, traders will also monitor if these countries will look to structure countermeasures to reduce the downward pressure. For example, by reducing production levels.
How Low can Crude Oil Prices Fall?
The average price of oil over the past 5 years is $70 per barrel, $5 (-5.60%) lower than the current price. However, the average price of this period takes into consideration the oil crisis from 2022 where prices rose above $100. More realistic support levels can be seen at $62 per barrel. The price has found support at this level in 2021, 2023 and 2024.

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Some economists, such as Tom Kloza, suggest that Crude Oil could potentially drop to $40 per barrel. This would occur if OPEC nations decide to reverse previous production cuts. However, most economists believe it's more realistic to expect Crude oil prices to drop between $54 to $62 per barrel in the medium to long term. Other organizations, such as the US Energy Information Administration believe oil will only drop to $74 per barrel in 2025 and $66 per barrel. According to the EIA, their predictions, which are higher than most, are due to strong economic activity.
In terms of indications and technical analysis, most point towards a downward trend. The price of Crude Oil is currently trading below most trendlines and the Volume-Weighted Average Price. In addition to this, Oscillators such as the RSI and MACD also indicate sellers are controlling the price movement. However, Crude Oil Traders should note this outlook may change if the price gains bullish momentum above $76.38.
Key Takeaways:

1. President Trump aims to bring Crude Oil prices back down closer to $40 per barrel.
2. Trump is driving a supply-demand imbalance to lower prices, starting with reversing oil field restrictions.
3. Economist Tom Kloza suggests Crude Oil could drop to $40 per barrel if OPEC reverses previous production cuts.
4. Most economists believe oil prices will fall to between $54 to $62.
5. The average price of Crude Oil over the past 5 years is $70 per barrel.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 24th January 2025.

The BoJ Hikes, But JPY Struggles To Maintain Momentum!

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The Bank of Japan has shocked the market by hiking 0.25%, the highest hike in 18 years. Despite the boost from the interest rate hike, the Japanese Yen remains far from being one of the day's top-performing currencies. Traders consider whether the outlook for the Japanese Yen is likely to change in 2025?

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EURJPY - Mixed Performance After the Bank Of Japan Increased Rates!
The EURJPY only traded 0.10% lower during this morning’s Asian Session, which may seem unimportant. However, the EURJPY has fallen 0.50% since the Bank of Japan’s rate decision was made public. Investors are considering if the EURJPY will see a change in trend and decline downwards after increasing in value throughout the week. Technical analysts advise even though the Japanese Yen may perform well in 2025, the currency may struggle in the short term.
In terms of economic and monetary policy influences the EURJPY potentially can come under pressure and move in favor of the JPY. This is mainly due to the market expecting the European Central Bank to cut 100-basis points in 2025. In addition to this, economists also believe the Bank of Japan will hike again in the second quarter. However, many traders believe the Japanese Yen may not see gains imminently or in the short term. Particularly, as both the French and German PMI data rose above previous expectations.

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Bank of Japan - How High Will Rates Rise?
The Bank of Japan decided to adjust interest rates by 0.25%. The central bank's policy rate rose from 0.25% to 0.50% bringing the rate to a 17-year high. The hike is an important move for the Bank of Japan as it is the first time they have hiked 0.25% since 2007. Of the 9 members who voted on interest rates, 8 voted to hike and only 1 voted against.
The rate decision is known to be positive for the JPY, but the press conference that followed also provided further support. Governor Ueda’s forward guidance on inflation and the economic outlook was largely positive. Amongst the positive tone were the Governor’s insights into the wage negotiations.
Last year, Japanese companies agreed to a 5.1% wage increase, the largest in 30 years. It was for this reason, the Bank of Japan was able to go from negative interest rates to where we are today. The Bank of Japan’s interest rates had been at 0.00% or lower, since 2010. For 2025, the trade union is pushing for at least a 5% hike overall and a 6% increase for smaller companies to reduce income gaps with larger firms. The Governor stated that these negotiations are progressing smoothly and that companies are likely to continue to increase wages.
The governor also advised the costs of imports are increasing due to a weak Japanese Yen and indicated that this is something the Central Bank wishes to correct. The Governor said the central bank would like rates to rise to the neutral range. However, this range is normally known to be between 1% and 2.5%. In the upcoming weeks, investors will be attempting to determine how high rates can go over the upcoming months.
EURJPY - Strong European PMI Data Supports the Euro!
The EURJPY exchange rate will also largely depend on the EUR and the European Central Bank. The European Central Bank will announce its rate decision on the 30th. Economists expect the ECB to cut 0.25% and indicate a full 1.00% cut in 2025. The bearishness of the ECB will also be a key factor in the pricing of the EURJPY.
The Euro is the best performing currency of the day after obtaining further support from the French and German PMI release. The French Services PMI read 45.3, higher than the 42.4 expectations. German Services and Manufacturing PMI also rose above expectations and read higher than the previous month. Below traders can view today’s analysis of today's PMI reports.

Speaking at the World Economic Forum in Davos amongst other bankers was José Luis Escriva, Governor of the Spanish Central Bank. Mr Escriva emphasized that the ECB should tailor its policy to remain neutral, neither slowing nor stimulating economic growth. He also stressed the importance of maintaining flexibility amid geopolitical uncertainty and adapting to new developments. However, most European bankers have warned that tariffs from the US would result in a pause.
Key Takeaways:

1. The Bank of Japan increases interest rates by 0.25%, the strongest hikes in 18 years.
2. The BoJ Governor advises wages in Japan will rise in 2025 and a weak JPY is triggering inflation.
3. German Services and Manufacturing PMI also rose above expectations and read higher than the previous month.
4. The Euro is the best-performing currency of the day after obtaining support from strong PMI data from Germany and France.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 27th January 2025.

Mild Risk-Off Sentiment: Stocks Slide, Yen Gains, and Bitcoin Dips Amid Tariff Tensions and Fed Anticipation.

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Asia & European Sessions:

 

1. European stock market indexes are lower in early trade, after a mixed session in Asia, where concern over the weaponization of tariffs and a possible tech shakeup put mainly China bourses on the back foot.
2. Trump’s threat to impose tariffs on Colombia, citing the country’s refusal to accept military flights carrying deported migrants, prompted Bogotá to threaten retaliatory measures. However, the White House later announced Colombia had agreed to accept the flights, defusing immediate tensions. Trump also signalled potential tariffs on Canada and Mexico starting February 1.
3. The Hang Seng is up 0.6%, while the Nikkei dropped as central bank action remains in focus and the yen rallied. DAX and FTSE100 are down -1.2% and 0.4% respectively in early trade and a -2.8% correction in the NASDAQ is leading US futures lower.
4. Bonds meanwhile are rallying as risk aversion picks up.
5. The Yen rose against the US dollar during Asian trading hours, as investors sought its safety amidst concerns about President Donald Trump’s tariff. On Friday, the yen briefly climbed 0.8% after the BOJ raised its policy rate to the highest level since 2008 but later retreated. BOJ Governor Kazuo Ueda indicated the central bank would maintain rate hikes as wage and price growth broadened but gave few hints on the pace of future increases.
6. Bitcoin saw a sharp decline as traders took profits just days followed Trump’s Friday announcement of a long-anticipated executive order establishing a working group to guide the White House on cryptocurrency policy. This group has been tasked with drafting a regulatory framework for digital assets within six months, while also exploring the idea of creating a national crypto stockpile.
7. Earnings reports from over 100 S&P500 companies will dominate headlines, featuring major players like Meta (META), Microsoft (MSFT), Apple (AAPL), and Tesla (TSLA). Wednesday is shaping up to be the busiest day, with additional reports from Starbucks (SBUX), Exxon (XOM), and Chevron (CVX).
8. The Federal Reserve will also be in focus on Wednesday, announcing its latest policy decision. While rates are expected to remain unchanged, investors will closely monitor Fed Chair Jerome Powell's remarks for clues about monetary policy for the rest of 2025.

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Financial Markets Performance:

1. The USDIndex is little changed at 107.40. Expectations of widespread tariffs on imports from countries like China, Canada, and Mexico have fueled inflation fears, driving US Treasury yields higher and bolstering the dollar.
2. The USDJPY traded at 155.88 after the BOJ raised rates and revised inflation forecasts higher.
3. The Mexican peso, often sensitive to tariff news, fell 0.7% to 20.409 per dollar, while the Canadian dollar weakened to 1.4385 per dollar.
4. The euro edged down 0.2% to $1.0455 ahead of an ECB meeting expected to lower borrowing costs. The British pound traded lower at $1.2428.
5. Bitcoin slipped below $98,300. Other tokens like Solana and Cardano, which had surged following Trump’s election victory, experienced even steeper losses, according to Bloomberg data.
6. Oil prices are down -0.4% at $74.28 per barrel.
7. Gold is down -0.6% at a still-high $2753.80 per ounce.

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Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 29th January 2025.

Market Recap: Treasury Yields Rise as Tech Stocks Rebound.

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Asia & European Sessions:

1. Markets had largely recovered from Monday’s selloff triggered by fears over AI competition from China’s DeepSeek. Dip buyers took advantage of the NASDAQ’s sharp decline, leading to a rebound of 2.03%, which erased much of Monday’s 3.07% drop. The S&P500 climbed 0.92% after shedding 1.46% the previous day, while the Dow inched up 0.31%.
2. Asian stocks and European equity futures increased following Wall Street’s tech-driven recovery. Japanese, Australian, and Indian markets saw gains, though many regional exchanges remained closed for Lunar New Year celebrations.
3. Nvidia regained nearly half of its 17% plunge, which had marked the largest single-day market cap loss in history.
4. As investor anxiety eased, the VIX volatility index dropped 8.66% to 16.35, after briefly touching 21 on Monday.
5. Positive earnings from Visa, Royal Caribbean, and Boeing helped lift sentiment, though JetBlue and General Motors disappointed.
6. Market attention is now turning to the Federal Reserve’s interest rate decision and earnings reports from major tech firms. The Fed is universally expected to leave rates unchanged at a 4.375% mid-range, taking a pause after three consecutive easings totalling -100 bps since the jumbo -50 bps in September. The resilient economy and still sticky inflation do not give the Fed room to credibly continue with its policy course. And we do not expect any surprises from Chair Powell's press conference where he should stress the economy remains solid, with risks to inflation and employment generally in balance.
7. Upcoming earnings: Microsoft, Tesla, Meta, IBM, ASML, ADP and Apple on Thursday.

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Financial Markets Performance:

1. USOIL rose 0.97% to $73.50 per barrel, while gold climbed 0.88% to $2,764 per ounce.
2. Aussie weakened, while 3-year bond yields dropped 5 bps on expectations of monetary easing. Australia’s core inflation cooled more than expected in the Q4 2024, prompting speculation that the RBA may soon pivot to rate cuts.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

Date: 03rd February 2025.

What do Trump's Tariffs Mean for the Financial Trading Markets?

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The announcement of the first Trump tariffs sends volatility through the roof. The market’s first reaction is to sell stocks and buy the US Dollar. The first countries to be hit by tariffs are Canada, Mexico and China. However, the US President also gave interesting indications on the government’s next moves.
SNP500 - Tariffs on China, Canada and Mexico Send Stocks Lower!
The SNP500 opens on a bearish price gap measuring 1.54% but trades 1.76% lower than Friday’s close. The decline is driven by a sharp drop in risk appetite from tariffs on Mexico, Canada, and China. The VIX, a risk sentiment indicator, is up over 8%, reflecting the fall in market confidence.

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Today’s sharp decline is one of the strongest seen in 2025 so far, but up to now remains weaker than the 2.95% decline from January 27th. The previous decline was due to the global repercussions of Chinese AI companies gaining momentum. However, this recent decline indicates that today’s downward trend may still gain momentum when the European and US sessions open.
The only concern for traders is the price is trading close to the SNP500’s recent support level. The SNP500’s support level at $5,920 in the previous week triggered an upward correction, partially fueled by earnings data. Alphabet is due to release its quarterly earnings report tomorrow after market close and Amazon on Thursday. Therefore, traders should be cautious that while the downward risk remains great, the earnings data may prompt demand similar to the week before.
China has also made a statement advising they are currently working on a trade proposal with the US in order to avoid tariffs. If an announcement is made indicating an agreement with China, the SNP500 could potentially gain bullish momentum. However, no such announcement has yet been made.
The US 10-ear Bond Yields increase in value during the Asian session and the VIX index continues to rise as the European session edges closer. If bond yields and the VIX continue to increase throughout the day, the bearish bias is likely to strengthen. According to price action and price momentum indicators, the SNP500 is likely to witness sell signals at $5,924 and below.
Euro - The Day’s Worst Performing Currency!
The Euro is coming under pressure due to Trump’s latest interview as he was walking off Airforce One. President Donald Trump commented on the first tariffs on Mexico, Canada and China, but also said that tariffs “will definitely happen with the European Union”. Whereas, with the UK he was less concrete in his response. With the UK Trump advised there will likely be tariffs but they “may be able to work” something out.
In terms of the European economy, December retail sales dropped 1.6% month-over-month (MoM) and slowed from 2.9% to 1.8% year-over-year (YoY). This reinforces the expectations of further interest rate adjustments by European Central Bank (ECB) officials. In the Eurozone’s largest economy, conditions for this shift are in place, as inflationary pressures ease and economic growth weakens due to sluggish demand and lower

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household activity.
Additionally, Bank of Finland head Olli Rehn and Bank of Estonia governor Madis Müller emphasized the priority of a dovish policy stance in his speech on Friday. The Euro is currently the worst-performing currency of the day.
The US Dollar - Safe Haven Status Increases Investor Demand!
The US Dollar is currently the best performing currency due to its safe haven status. The USD Index is currently trading 1.25% higher and is the only currency index witnessing gains. The currency is witnessing the strongest gains against the Euro and the New Zealand Dollar.
Consumer inflation in the country remains well above the 2.0% target, and some analysts believe it has stabilized at this higher level, raising the chances of a pause in monetary easing. This is likely to continue supporting the US Dollar, particularly if this week’s employment data beats expectations.

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Key Takeaways:

1. Trump's announcement of tariffs on Mexico, Canada, and China sparks a sharp market decline, with the S&P 500 down by 1.76% and risk appetite falling.
   As the US 10-year bond yields increase and the VIX climbs, bearish momentum strengthens, signaling further declines in the S&P 500.
2. The Euro weakens after Trump hints at potential tariffs on the European Union, with December retail sales and ECB policies adding to downward pressure.
3. The US Dollar benefits from its safe haven status, rising 1.25% as investors seek stability amid tariff-related uncertainty.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.