Weekly Updates 25/9/23 – 29/9/23 September 25, 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 (18 Sep 2023 – 22 Sep 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 US Federal Reserve deciding to pause rate hikes, signaling that rates are going to stay high longer than market participants expect. Traders and investors took the hawkish Fed news and markets sold off afterwards. Pricing in a recession and how rates will affect the overall economy.
Updates for the week (25 Sep 2023 – 29 Sep 2023)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s macro news mainly focuses on GDP data, New Home Sales and both Personal Income and Personal Spending Data from the US. With analysts and market participants forecasting a potential recession in Q4 of 2023 to early 2024, macro data like GDP will give market participants a glimpse in to overall strength of the economy while Personal Spending and Personal income will show the overall strength of the US consumer which contributes ~68% of GDP. A drop in consumer spending is a leading indicator for a potential recession.
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 Micron, Nike, Carnival and Costco from the US. With Micron’s June earning release being a huge downward surprise, market participants are eager to see how Micron will deliver in the latest quarter. Nike and Carnival’s corporate earnings are under pressure from the strong US dollar as both companies have a significant portion of their profits from overseas markets. Carnival is forecasted to report first quarterly profit since the start of Covid-19, however, rising oil prices and strong US dollar may potentially lead to a disappointing earning release.
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/JPY Short Term Range Sets up Breakout / Mean Reversion Trade – By Jeraldine Tan
Key Entry Price Pivot(s):
- 148.46
Recommended Trade:
- Long at 148.58
- Stop Loss at 147.58 (100 pips)
- Take Profit at 150.58 (200 pips)
Alternative Case:
- Short at 148.38
- Stop Loss at 148.88 (50 pips)
- Take Profit at 147.38 (100 pips)
Remarks:
- USD/JPY remains in a Broad Bull Channel
- Momentum on Daily chart still remains strong for price to test the high of 151.945
- Hence traders who are bullish USD from here on can structure a long trade on the breakout 148.46 high in hopes to ride the next wave up
- Alternative case is presented above for traders who are bearish on USD/JPY to structure a mean reverting trade to the downside
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
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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.
