CONSEILS ET ASTUCES DE TRADING

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This week’s macro update highlights ongoing recession warnings in the US, volatility in bond markets, and shifts in global manufacturing and services PMIs. Key market focus includes the Fed’s blackout period, US Q1 GDP, and earnings reports from major companies like Alphabet, Microsoft, and Meta Platforms.

Microsoft and Alphabet’s strong earnings have given US futures a temporary lift, with after-hours gains boosting sentiment. However, mounting concerns over US economic activity and technical deterioration on E-Mini NASDAQ 100 and S&P 500 futures raise questions about the sustainability of the rally.

The US faces mounting recession risks amid aggressive monetary tightening, fluctuating Treasury yields, and geopolitical tensions. Key events this week include Fed and ECB rate decisions, major earnings reports from Apple, and US Non-farm Payrolls data, all shaping market sentiment.

Economic announcements, especially tier-one data, significantly influence markets. Traders should watch the Fed’s decisions, inflation, labor market data, and growth indicators like PMIs and Nonfarm Payrolls for insights into market trends and economic health.

Major central banks hiked rates last week, with the Fed signaling a likely pause amid concerns over policy impacts on economic activity. Nonfarm Payrolls exceeded expectations, but market focus now shifts to inflation data and geopolitical tensions.

US inflation is falling but remains stubbornly high, leaving the Federal Reserve on pause for now. April’s CPI data provided mild relief, but it wasn’t enough to drive a breakout in US equity futures, which continue to face resistance at key levels.

The US debt ceiling crisis continues to dominate market sentiment, fueling safe-haven flows into the USD and Japanese yen. Inflation trends in the US and China also weigh heavily on risk appetite, with stubbornly high US core inflation and cooling Chinese demand adding to concerns.

Understanding the roles of hawks and doves in monetary policy is essential for interpreting interest rate decisions. Hawks favor higher rates to combat inflation, while doves advocate lower rates to boost economic growth. The FOMC’s stance significantly impacts markets and economic direction.

Weakening consumer indicators and disappointing earnings from Home Depot underscore challenges for the US economy. While tech stocks have buoyed markets, resistance on e-mini S&P 500 futures at 4145/4190 remains firm, with signs pointing to potential corrections ahead.

Uncertainty surrounding the US debt ceiling has led to cautious market behavior, with US equities consolidating and big tech stocks providing support. However, volatility could rise sharply if the impasse continues, impacting indices like the S&P 500 and NASDAQ.

Macro Matters – Weekly review, w/c May 22

Treasury yields have surged, breaking key levels and driving a significant shift in the USD outlook. Yield differentials are pulling major forex pairs like EUR/USD and USD/JPY, while the Dollar Index has decisively reversed its bear trend, signaling a medium-term range trade.

The US debt ceiling standoff, hawkish Fed rhetoric, and rising bond yields are creating market tensions, while stubborn UK inflation challenges the BoE. In commodities, oil sees volatility on mixed OPEC+ signals, and gold weakens under rising yields and USD strength.

The NASDAQ’s impressive 2023 rally faces potential exhaustion, with signs such as declining market breadth, other markets’ struggles, and technical indicators suggesting a correction. A pullback could provide a reset, impacting broader markets and investor sentiment.

The Fed is likely to “skip” a rate hike in June, shifting attention to July for potential action. Meanwhile, markets have moved past the debt ceiling crisis, fueling a risk-on sentiment. Key macro data, including ISM Services and jobless claims, will provide further market direction this week.

The strong negative correlation between gold and the USD makes calling the USD’s direction essential for gold traders. With key support and resistance levels forming on gold futures and upcoming CPI and Fed decisions, the market is at a critical juncture.

Central banks take the spotlight this week with hawkish surprises, critical economic data, and major policy decisions from the Fed, ECB, and BoJ. Market volatility has subsided, but key events like US CPI and Fed guidance could ignite movement across bonds, equities, and commodities.

The Federal Reserve held rates steady but signaled a hawkish stance with two more hikes projected in 2023. Despite this, markets remain skeptical, limiting USD gains. Inflation continues to ease, while US equity markets pause their rally but show resilience.

Central banks maintain a hawkish bias as inflation remains high but shows signs of disinflation in major economies. The Fed’s “hawkish hold” and hints at future hikes have been met with skepticism, leading to USD weakness. Upcoming events focus on central bank decisions, inflation data, and Fed Chair Powell’s testimony.

Markets have grown cautious following the Fed’s “hawkish hold” and Jerome Powell’s Congressional testimony, which left future rate hike intentions uncertain. US index futures are pulling back after a strong rally, reflecting a pause in positive sentiment as markets await clarity on inflation and the economy.

Hawkish central banks, disappointing flash PMIs, and strained US-China relations are weighing on market sentiment. However, US housing indicators and tech stocks show resilience, while upcoming data on inflation and consumer confidence could drive market direction.

US index futures face a near-term pullback as hawkish Fed expectations weigh on sentiment. Encouraging consumer data and resilient trends in key sectors suggest this correction is a healthy pause, presenting a potential buying opportunity.

Macroeconomic themes highlight central banks’ hawkish stance, geopolitical uncertainty in Russia, and stronger US economic data. Rising bond yields, a resilient US economy, and EUR and GBP strength drive market dynamics, while commodities face mixed signals from yields and production cuts.

Hawkish FOMC minutes continue to suggest more rate hikes, driving Treasury yields higher and casting doubt on the sustainability of the rally in US index futures. Negative technical divergences are emerging, signaling potential downside risk in the near term.

TradeDay Macro Matters highlights global markets grappling with rising rate expectations, sharp bond yield movements, and volatile futures. Central banks remain hawkish, with upcoming inflation data and policy meetings set to drive significant market direction.

US index futures surge as a sharper-than-expected drop in US CPI bolsters market sentiment. Lower inflation data suggests the Fed may not need to maintain its hawkish stance, sparking a rally in futures and a decisive fall in bond yields.

Disinflation trends in the US and China are reshaping market dynamics, reducing the likelihood of further aggressive Fed hikes. Falling US yields and a weakening USD are spurring rallies in metals, oil, and equities, while the steepening yield curve signals significant shifts across asset classes.

The correction in Gold futures has transitioned into a new bullish trend as USD weakness drives momentum. Recent softer US data has shifted Fed tightening expectations, fueling gold’s rally towards critical resistance at $1983. A breakout here could unlock significant upside potential.

A pivotal week for markets as the Fed, ECB, and BoJ announce monetary policy decisions. Traders anticipate elevated volatility with central bank updates, earnings season, and key economic data shaping market movements.

The Federal Reserve’s July meeting delivered a 25bps hike as expected, but a less pessimistic tone and a focus on data dependency boosted US index futures. Optimism surrounding falling inflation and steady economic growth supports a positive market outlook.

Major central banks are approaching peak interest rates as inflation metrics ease and growth concerns diminish. Subdued volatility amid the summer lull keeps market reactions limited, with Nonfarm Payrolls and key economic data in focus this week.

Oil futures have rallied 22% in just over a month, driven by tight supply and improving demand fundamentals. With key resistance at $83.53 approaching, the rally faces critical tests, including potential underwhelming Chinese stimulus and uncertainty from Fitch’s US credit downgrade.

The Fitch downgrade of US credit and a spike in Treasury yields jolted markets, with longer-duration bonds experiencing heightened volatility. The Nonfarm Payrolls report offered some relief, bolstering hopes that the Fed has reached peak rates. Meanwhile, oil futures rallied on Chinese stimulus, and gold showed resilience against USD movements.

US CPI inflation softened again, bolstering expectations that the Federal Reserve is likely to pause further rate hikes. This has led to a risk-positive reaction in markets, with US index futures rebounding. However, questions remain whether this move can mark the end of recent corrections or sustain a renewed rally.

Markets are grappling with the uncertainties of a disinflationary path and the staying power of the USD rally. While US inflation shows signs of easing, mixed data and Fed hawkish rhetoric maintain market volatility. Meanwhile, global risk appetite faces challenges from China’s property market woes and cautious central bank policies.

Concerns over higher bond yields and risks of contagion from China’s property sector are fueling a significant correction in US index futures. Both NASDAQ and S&P 500 futures have broken key uptrend levels, signaling a shift in sentiment as technical indicators turn increasingly bearish.

China’s ongoing economic and real estate struggles, coupled with rising global bond yields, are weighing heavily on market sentiment. As concerns mount over China’s property sector and its impact on the global economy, US markets are seeing a shift in outlook, with stronger economic data driving expectations of prolonged higher interest rates.

Nvidia’s stellar Q2 results have propelled a recovery in US index futures, particularly the NASDAQ 100, amid broader market uncertainty. While Nvidia’s guidance and buyback announcement impressed, key resistance levels for futures remain critical to sustaining this rally. The outlook hinges on whether Nvidia’s momentum can continue driving broader market sentiment.

Diverging monetary policies across major economies are shaping markets, with the U.S. staying resilient while Europe and the UK face slowing growth. Key macroeconomic and geopolitical events, including Prigozhin’s death and U.S. Fed expectations, further influenced market sentiment.

A shift in U.S. Federal Reserve expectations, soft labor market data, and the potential impact of El Niño on energy markets set the tone for a volatile week in financial markets. Risk assets rallied while commodities like oil and gold responded to weakening yields and a softer U.S. dollar.

The ECB raised rates to record highs but hinted at pausing further hikes, while U.S. inflation data exceeded expectations, challenging the Fed’s plans to slow rate increases. Mixed signals from the U.S. labor market and China’s economic stabilization added complexity to global market dynamics.

The Fed reaffirmed its “higher for longer” rate outlook last week, driving market uncertainty alongside disappointing global PMI data and U.S. government shutdown fears. Meanwhile, the Bank of England paused rate hikes amid cooling inflation, while the Bank of Japan maintained its dovish stance.

Last week saw heightened market activity as the U.S. government narrowly avoided a shutdown, Treasury yields hit multi-year highs, and oil prices surged, fuelling inflationary concerns. Meanwhile, U.S. core PCE inflation cooled slightly, offering some relief amidst economic uncertainty.

Bond markets experienced significant turmoil last week as U.S. and global yields surged to multi-year highs, weighing on equities. While PMI and employment data surprised to the upside, inflation concerns persist, with the U.S. CPI release later this week expected to dominate market focus.

The Israel-Hamas conflict introduced fresh concerns for markets last week, prompting a flight to quality as bond yields fell. Meanwhile, US inflation showed persistent pressures, with CPI slightly exceeding expectations, and Fed officials noted that rising yields might reduce the need for further rate hikes.

The Israeli-Hamas conflict heightened global market uncertainties last week, alongside surging US Treasury yields that briefly breached 5%. While US retail sales exceeded expectations and earnings reports were solid, Federal Reserve Chair Jerome Powell reiterated that inflation remains too high.

Macro Matters – Weekly review, w/c October 30

The Federal Reserve held interest rates steady last week, signalling a cautious but slightly optimistic stance on economic growth. Key developments included Treasury bond auctions, the BoE maintaining its hawkish tone, and Apple reporting a fourth consecutive quarter of declining revenue.

Macro Matters – Weekly review, w/c November 13

US CPI data exceeded expectations, driving rallies in both stocks and bonds. PPI and Retail Sales also beat forecasts, while UK CPI showed a significant drop. The US-Sino summit provided positive signals, and the US Senate averted a shutdown with a stop-gap funding measure.

Thanksgiving week saw subdued markets with low volatility as FOMC minutes highlighted a patient Fed. US PMI data hinted at economic challenges, while Nvidia reported strong earnings but faced hurdles ahead.

Federal Reserve officials hint at a dovish pivot, with rate cuts anticipated by 2024. Economic data shows strong GDP growth, declining inflation, and challenges in manufacturing, painting a mixed picture for global markets.

The S&P 500 hit a new 2023 high, bolstered by strong employment data and cooling inflation. Anticipation of dovish pivots from the Federal Reserve and ECB signals potential market shifts ahead.

US stocks reached new highs, led by a dovish Fed pivot, while global central banks took varied stances on monetary policy. CPI and retail sales data showed resilience, fueling optimism about economic momentum.

Stocks and bonds faced a sell-off to start 2024, partially reversing late-2023 gains, as US Fed minutes offered limited clarity on rate cuts. PMI data showed resilience, and the US labor market ended the year strong with jobs data surpassing expectations.

Stocks rallied, reversing a 2024 correction, while US CPI came in hotter than expected, impacting rate cut projections. Earnings season kicked off with mixed results, and the SEC approved Bitcoin ETFs, signaling potential cryptocurrency adoption growth.

Goldman Sachs exceeded Q4 expectations, while Morgan Stanley fell short. TSMC forecasted strong growth driven by AI, and Apple stocks rebounded on AI-driven optimism. US retail sales beat expectations, but March rate cut hopes dimmed amid Fed and ECB caution.

US stocks climbed to record highs, driven by tech gains and stronger-than-expected GDP growth. Netflix and IBM posted stellar earnings, while Tesla disappointed. The Fed and ECB signaled cautious stances on rate cuts, and the PBoC introduced stimulus to stabilize markets after sharp declines.

US stocks surged to record highs as strong earnings and a stellar employment report buoyed markets. The Fed dampened hopes for March rate cuts, while the Bank of England maintained a cautious stance. Key earnings from Microsoft, Meta, and Amazon exceeded expectations, and US job growth far outpaced forecasts.

The S&P 500 broke the 5,000 mark for the first time as markets rallied, bolstered by Big Tech gains and easing inflation concerns. Meanwhile, Jerome Powell reiterated caution over early rate cuts, regional banks grappled with commercial real estate risks, and the US saw record demand for its $42 billion 10-year note auction.

The financial markets responded sharply to higher-than-expected US CPI data, with bond yields spiking and equities retreating. Nvidia continued its meteoric rise, overtaking Alphabet in market capitalization, while Japan’s Nikkei hit a multi-decade high. Retail sales data showed unexpected declines, signaling potential headwinds for consumption.

Nvidia’s stellar earnings propelled US markets to record highs, while the Fed maintained a cautious stance on rate cuts, driving bond yields higher. Mixed PMI data highlighted varied economic trends globally, with the US and UK showing resilience while Germany faced challenges.

Stocks rallied to record highs, buoyed by steady inflation data and solid PMI readings from China, Europe, and the UK. Attention now turns to Powell’s testimony and the February employment report, with implications for the Fed’s rate trajectory.

US stock indices hit record highs, driven by investor optimism around potential Federal Reserve rate cuts. Meanwhile, mixed economic signals emerged from Fed Chair Powell’s testimony, the European Central Bank’s stance on rate cuts, and the Bank of Japan’s anticipated policy shift.

US inflation data surprised to the upside, with warmer-than-expected CPI and PPI reports fueling concerns about persistent price pressures. Treasury yields surged in response, heightening anticipation for the upcoming Fed meeting, where focus will be on the dot plot projections for future rate decisions.

Global stock markets rallied as dovish signals from central banks, including the Fed’s projection of rate cuts and the SNB’s surprise reduction, boosted investor sentiment. Key developments like the BoJ’s exit from negative rates and cooling UK inflation added to the week’s pivotal financial events.

Markets experienced a mixed but stable week, with US and global stocks consolidating gains amidst economic uncertainty. US data presented a nuanced picture of resilience and caution, while the Bank of Japan addressed currency intervention concerns. Eyes are now on the US employment report and PMI data.

Markets experienced a volatile week as global stocks slid, driven by surging oil prices and Federal Reserve caution on rate cuts. The US labor market remained resilient with robust job growth, while geopolitical tensions in the Middle East continued to impact oil prices and market sentiment.

Markets faced a volatile week as stocks slid amid inflation concerns, while bond yields surged and the US dollar strengthened. Geopolitical tensions in the Middle East added further uncertainty, driving investors toward safe-haven assets like gold and the dollar.

Markets experienced a mixed week, with US stocks rebounding on strong tech earnings while bond yields climbed amid inflation concerns. Key events ahead include the Fed’s rate decision, global PMI data, and US employment figures, all of which could shape market sentiment.

April saw a dip in U.S. stock performance, with the S&P 500 closing the month down 4.1%. However, late-week rebounds and optimism about potential Federal Reserve rate cuts provide hope for recovery. Key economic events, including the Fed’s stance on rates and major earnings reports, have shaped market sentiment.

US and global equity markets surged to new record highs, driven by optimism following cooling inflation data and weaker retail sales. These developments have raised prospects of Federal Reserve rate cuts, fueling broad-based stock rallies across sectors and geographies.

Global and US stock averages hit record highs, driven by tech gains and strong market breadth. Nvidia’s remarkable earnings bolstered investor confidence, while Fed Minutes signaled a hawkish bias. Key inflation data from the eurozone and the US will dominate market focus as May concludes.

US stock indices hit record highs as inflation cools, while bond yields fell amid expectations of slower rate cuts. European markets saw sharp declines after France announced snap elections, raising political uncertainty. This week brings key central bank decisions, inflation data, and global PMI reports.

US stock indices maintained their H1 2024 gains, with inflation cooling and signs of a potential Federal Reserve rate cut emerging. Meanwhile, Biden’s debate performance raised concerns, and Japan’s yen weakness boosted the Nikkei. A big week lies ahead with US jobs data and Fed minutes in focus.

Markets reached record highs in a holiday-shortened week, driven by growth stocks and falling Treasury yields. US PMI data disappointed, while European data remained resilient. The Labour Party won a landslide victory in the UK election, ending the Conservative Party’s 14-year reign.

US stock averages hit new records as inflation cools and rotation shifts focus to value stocks. Treasury yields plunged post-CPI, raising expectations of a more dovish Fed. Meanwhile, the earnings season began with financials dipping, and political tensions heightened following an assassination attempt on Trump and Biden’s NATO summit gaffe.

Sector rotation continues as tech and growth stocks decline, while small-cap and value stocks gain momentum. Solid US retail sales, expectations for Fed rate cuts in September, and ECB policy decisions shape market sentiment as Biden faces pressure to reconsider his 2024 candidacy.

Stock rotation continues as mega-cap technology stocks falter, while small-cap and midcap stocks outperform. Key data from the Federal Reserve, Bank of England, and US jobs report, coupled with major earnings from Microsoft, Apple, Meta, and Amazon, make this a critical week for markets.

Global markets plunged last week amid heightened US recession fears following weak jobs data and disappointing earnings. The US added just 114,000 jobs in July, far below expectations, as unemployment climbed to 4.3%. Investors now anticipate a potential Federal Reserve rate cut in September, while mixed corporate earnings and global market volatility persist.

TradeDay Macro Matters highlights key market developments, including a robust US stock market rebound, easing inflation, and solid retail sales data that alleviated recession fears. This week, focus shifts to Federal Reserve actions, including the FOMC Minutes and the Jackson Hole Symposium.

Today marks the launch of TradeDay Macro Matters, a weekly recap blog highlighting key macroeconomic, fundamental, and geopolitical developments. This series will focus on events impacting the wider financial markets, particularly the US, while addressing the challenges and opportunities faced by traders.

The past few months have seen volatility in the equity markets, but a key trend has emerged: growth stocks are decisively outperforming value stocks. This shift has become the primary narrative of the US equities market in 2023, driven by factors like interest rates and investor sentiment.

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