Weekly Updates 1/1/24 –5/1/24 January 2, 2024
This weekly update is designed to help you stay informed and relate economic and company earnings to potentially value-add your CFD (Contract For Difference) trading via hedging (risk reducing). This article should be used for educational purposes only and not as financial advice. We urge all traders to carry out your own due diligence before submitting trades.
Recap for last week (25 Dec 2023 – 29 Dec 2023)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week’s market movement revolved around the Chinese government rolling back on the proposed gaming restrictions and having a more pro-business stance by approving game titles. This has caused the HK stock market to rally on bullish news and market participants are expecting the Chinese government to be more dovish and pro-business sentiment.
Updates for the week (01 Jan 2024 – 05 Jan 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news mainly focuses on employment data and manufacturing data from the US and China Manufacturing PMI. Market participants and the US Federal reserve is looking at employment data closely to determine if the expected rate cuts in 2024 will be as early as March or will be later in the year. As the US Fed has the mandate of keeping inflation under control and low unemployment (between ~ 3-4%). Investors and traders are also looking at Caixin China Manufacturing PMI as an early indicator on the manufacturing industry in China.
Traders should position their portfolio before the macro news release to not be negatively affected and have good risk management.
This week’s corporate earnings focuses on global brand Constellation Brands. Investors are eager to receive the forward guidance and sales figures of Constellation Brands for the holiday periods. As Constellation Brands mostly sell a wide range of alcoholic beverages ranging from beer, wine and spirits. Earnings from Constellation Brands give an early indicator on the spending over the holiday period.
If you hold equity positions in these stocks, you can hedge your positions using CFDs to mitigate the risk of disappointing earnings releases.
For those looking to speculate or capitalize on the increased volatility, CFDs provide leverage and ease of going long and short across a broad range of products available.
USD to rise against EUR at the start of the year – by Tan Peng Chien
Key Entry Price Pivot(s)
- 1.0830
Recommended Trade
- Short at 1.1050
- Stop Loss at 1.1174
- Take Profit at 1.0733
Alternative Case
- Long at 1.1125
- Stop Loss at 1.098
- Take Profit at 1.125
Remarks
- With price filling an imbalance as suggested last month, we could expect a similar scenario as we usher in the new year.
- A fair value gap can be spotted between the prices of 1.0825-1.0875, with its sizing as well as liquidity below the level of 1.0723, a possible outcome would be for price to push past the imbalance and dive past the targeted liquidity level. A set stop loss level of 1.1174 would allow this trade to have a healthy 1:3 risk-to-reward ratio.
- With respect to the current trend, the Euro could also continue to strengthen against the U.S. Dollar and a stretch towards the previous high of 1.1276 is also possible.
If you have any feedback or questions, feel free to email us at samht@phillip.com.sg or onishathyeyn@phillip.com.sg or cfd@phillip.com.sg.
Disclaimer
This material is provided to you for general information only and does not constitute a recommendation, an offer or solicitation to buy or sell the investment product mentioned. It does not have any regard to your specific investment objectives, financial situation or any of your particular needs.
Accordingly, no warranty whatsoever is given and not liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of your acting based on this information. Investments are subject to investment risks.
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About the author
Sam Hei Tung (Dealing) and Onisha Thye (Dealing)
Sam graduated from National University of Singapore with a Master of Science in Finance. He personally manages his own investment portfolio and does equity and economic research in his free time. Sam believes that education and information is essential to making good financial decisions.
Onisha is a dealer at the CFD Dealing Desk. She graduated from Monash University with a double major in finance and econometrics. Her natural curiosity for finance is what drove her to be in this field as she is fascinated by all the possibilities and opportunities that are available to grow one’s wealth, either through trading or investment.
