Daily Market Outlook - Wednesday, February 21

“Markets On Nvidia Earnings Watch”

This morning, Asian stock markets are showing a varied performance, with Chinese indices gaining while most others are experiencing declines. A Chinese media source reported that a key interest rate was kept unchanged this week due to concerns about its impact on the Yuan. In the meantime, Japan reported a smaller-than-expected trade deficit in January, thanks to strong exports, especially in the automobile sector, and a decrease in imports.

Today's key events include this morning's publication of UK public finance data for January, which showed a net borrowing of -£17.6bn. This amount is significantly higher than last year's figure, indicating a potential surplus due to self-assessment receipts. The Office of Budget Responsibility has stressed the importance of January data in evaluating the fiscal deficit, which could impact expectations for tax cuts in the upcoming budget. Furthermore, the CBI Industrial Trends survey for February provides insights into the factory sector, complementing tomorrow's purchasing manager’s survey. The previous month's survey revealed ongoing declines in orders, raising concerns about activity levels and potential price pressures from shipping disruptions in the Red Sea. A small increase is expected in the European Commission's consumer confidence measure for February, although it remains below late 2023 levels, likely reflecting consumer uncertainty regarding ECB interest rate cuts. Bank of England policymaker Dhingra, known for her cautious approach, is set to speak today after expressing concerns about downside growth risks during a recent testimony to a Parliamentary Committee.

Later, the minutes of the late January US Federal Reserve policy meeting will be made public. Despite mixed economic data pushing back expectations for an interest rate cut, investors are eager for insights into the Fed's position and potential reasons for rate reductions. However, markets are eagerly anticipating what could be the most significant earnings report in a long time, as Nvidia, the leading company in the AI industry, is expected to announce another exceptional quarter. Despite the stock's remarkable rise over the past year and a half due to the AI craze, investors may feel let down if the chipmaker is unable to sustain its impressive growth. Nvidia is expected to triple quarterly revenue to around $20 billion, with a focus on its forecast and China. Investors are concerned about whether its significant stock increase has reached its peak. The company's stock has risen 40% this year and 239% in 2023. Nvidia options indicate a potential 11% swing after earnings, which may impact global markets and record peaks in Europe and Japan

 

Overnight Newswire Updates of Note

  • Fed Set To Keep Shrinking B/S While Liquidity Drain Continues

  • US House Republicans Privately Expect Government Shutdown

  • US To Announce ‘Major’ Sanctions Friday Over Navalny Death

  • China Restricts Quant Fund Lingjun In Effort To Boost Markets

  • Japan Tankan Manufacturers' Gloom Rises, Adds Growth Pains

  • Japanese Export Growth Beats Bets, Keeping BoJ Options Open

  • Australia’s Wage Growth Quickens Further RBA’s Forecast Peak

  • Houthis Fire At Ship With Humanitarian Aid To Yemen, US Says

  • Hunt Weighs Plans To Spur Pension Funds To Invest In UK Assets

  • Bezos Finishes 50 Million Amazon Stock Sale Netting $8.5 Billion

  • HSBC’s Earnings Sink On $3 Billion Impairment On Chinese Bank

(Sourced from Bloomberg, Reuters and other reliable financial news outlets).

 

FX Options Expiries For 10am New York Cut

(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)

  • EUR/USD: 1.0780 (EU1.59b), 1.0778 (EU872.2m), 1.0815 (EU732m)

  • USD/JPY: 145.00 ($1.68b), 150.00 ($1.26b), 147.50 ($1.24b)

  • USD/CNY: 7.5000 ($399.8m), 7.2500 ($336.4m)

  • USD/CAD: 1.3400 ($500m), 1.3600 ($312.5m), 1.3505 ($308m)

  • NZD/USD: 0.6060 (NZD700m), 0.6100 (NZD303.4m)

  • USD/MXN: 16.95 ($300m)

 

CFTC Data As Of 13/02/24

  • British Pound net long position is 50,472 contracts.

  • Japanese Yen net short position is -111,536 contracts.

  • Bitcoin net short position is -1,921 contracts.

  • Swiss Franc posts net short position of -6,014 contracts.

  • Japanese Yen net short position is -111,536 contracts.

  • Equity Fund managers raise S&P 500 CME net long position by 17.391 contracts to 930,253.

  • Equity fund speculators trim S&P 500 CME net short position by 39.481 contracts to 384.474.

 

Technical & Trade Views

SP500 Bullish Above Bearish Below 4975

  • Daily VWAP bearish

  • Weekly VWAP bullish

  • Above 5043 opens 5086

  • Primary support 4900

  • Primary objective is 5120

(Click on image to enlarge)

EURUSD Bullish Above Bearish Below 1.08

  • Daily VWAP bullish

  • Weekly VWAP bearish

  • Above 1.109 opens 1.10

  • Primary resistance 1.0950

  • Primary objective is 1.0650

(Click on image to enlarge)

GBPUSD Bullish Above Bearish Below 1.2683

  • Daily VWAP bullish

  • Weekly VWAP bearish

  • Above 1.27 opens 1.2770

  • Primary resistance  is 1.2785

  • Primary objective 1.2429

(Click on image to enlarge)

USDJPY Bullish Above Bearish Below 149.50

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 149.50 opens 148.70

  • Primary support 145.85

  • Primary objective is 152

(Click on image to enlarge)

AUDUSD Bullish Above Bearish Below .6590

  • Daily VWAP bullish

  • Weekly VWAP bearish

  • Below .6500 opens .6420

  • Primary support .6525

  • Primary objective is .6260

(Click on image to enlarge)

 

BTCUSD Bullish Above Bearish below 51000

  • Daily VWAP bullish

  • Weekly VWAP bullish

  • Below 48500 opens 46500

  • Primary support  is 44390

  • Primary objective is 54000

(Click on image to enlarge)

 


More By This Author:

Miners Lose Their Shine, FTSE Fall Eased By Robust Barclays Gains
Daily Market Outlook - Tuesday, Feb. 20
FTSE Fighting For A Breakout Above Pivotal Resistance
How did you like this article? Let us know so we can better customize your reading experience.

Comments

Leave a comment to automatically be entered into our contest to win a free Echo Show.
Or Sign in with