Weekly Updates 12/6/23 – 16/6/23 June 12, 2023
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 (5 June 2023 – 9 June 2023)
*These prices are taken based on the previous Monday’s opening price and the preceding Friday’s closing price.
Last week’s major action revolved around projection on the upcoming China stimulus which can give China company earnings a much needed boost. Pushing the Hang Seng and Hang Seng Tech index significantly higher. US markets are quite muted as market participants are waiting for the Fed’s rate decision this week during the June FOMC meeting. Crypto markets are in freefall after SEC and other regulators clamp down on both Coinbase and Binance over not registering as a security exchange.
Updates for the week (12 June 2023 – 16 June 2023)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news update focuses on US Fed FOMC’s rate decision which is expected to pause rate hikes and Industrial and Retail data coming out of China which will give market participants more information on the strength of the China economy and consumer. CPI data from US on Tuesday is expected to drop to 0.2%. US Fed will be looking closely to CPI data to justify upcoming rate decisions in July and this year.
This week’s corporate earnings releases focus on Oracle and Adobe from the US. Nearing the end of the earnings season, most major companies have already reported. Given both Adobe and Oracle’s impressive ~33% gains year to date, the upcoming corporate earnings will likely cause an upside or downside surprise as market participants have been pricing in major positive news and AI advancements.
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.
CapitaLand Ascendas REIT (SGX: A17U) Trading Opportunity
Trade Set-up:
- A17U’s share price has been on a downtrend lately
- From the chart, it appears to be reaching the support level of $2.61
- RSI also indicates that it is oversold and a small uptick in momentum can be seen as of 09/06/23
- Its dividend yield in 2023 so far has been an attractive 5.37% as well
Trade Execution:
- If A17U bounces off the support, traders could seek to long and take profits at $2.66
- However, if price breaks below support, traders can look to the $2.58 level to signal a further downtrend
EUR/USD pulls itself above the SMA20 as Fed & ECB play gains attention
Trade Set-up:
- EUR/USD pulled itself above the SMA20 as it entered a mini-consolidation phase amid a cautious mood ahead of the key week comprising the European Central Bank (ECB) and the US Federal Reserve (Fed) monetary policy decisions. Apart from the pre-event anxiety, the recent challenges to the sentiment and reassessment of the previous bias about the ECB and the Fed’s next move also weigh on the Euro pair.
- From a technical perspective, the pair hasn’t sufficiently broken out of its “down” trend as the SMA crossover signals, along with the RSI still remaining under 50. Key resistance levels include the 1.0800 handle and the SMA50 as the next area of interest. Key support would be the low established at 1.0630.
Trade Execution:
- Technically, the pair is in the min-consolidation phase, and investors should stay on the fence being cautious of how the price action would develop. Traders could look for “break-out” plays i.e. to buy when prices break-out above 1.0800 or to sell when prices break-out below 1.0630, while keeping their stop-losses near.
- Traders who are already in positions could use these levels for guidance on their exit strategies.
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.
The risk of loss in leveraged trading can be substantial. You may sustain losses in excess of your initial funds and may be called upon to deposit additional margin funds at short notice. If the required funds are not provided within the prescribed time, your positions may be liquidated.
The resulting deficits in your account are subject to penalty charges. The value of investments denominated in foreign currencies may diminish or increase due to changes in the rates of exchange.
You should also be aware of the commissions and finance costs involved in trading leveraged products. This product may not be suitable for clients whose investment objective is preservation of capital and/or whose risk tolerance is low.
Clients are advised to understand the nature and risks involved in margin trading. You may wish to obtain advice from a qualified financial adviser, pursuant to a separate engagement, before making a commitment to purchase any of the investment products mentioned herein. In the event that you choose not to obtain advice from a qualifies financial adviser, you should assess and consider whether the investment product is suitable for you before proceeding to invest and we do not offer any advice in this regard unless mandated to do so by way of a separate engagement.
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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.
