Weekly Updates 3/6/24 – 7/6/24 June 3, 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 (27 May 2024 – 31 May 2024)
*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 consumers holding back on US economic growth in the Q1 as inflation cools. There is a downward revision to consumer and equipment spending along with a key measure of inflation which is consumer spending has ticked down by 0.2% that keeps the Feds on track to start lowering interest rates before the end of 2024. US treasury yields ticked lower after this modest downward revision to inflation in Q1 and equity index futures fell by 0.41% for S&P 500; Nasdaq fell 1.4%. On the other hand, Hang Seng Tech fell by 2.12% mainly due to drags from Meituan and Tencent where there are unexpected contractions in manufacturing activities plus impact of price war between tech companies.
Updates for the week (03 June 2024 – 07 June 2024)
The data below showing the economic releases read as “Analyst’s estimate/ Consensus | Previous data”.
This week’s economic highlight is on employment data coming out of the US from ADP Employment change to change in nonfarm payrolls and unemployment rate. The US Fed closely monitors employment data and inflation numbers to determine interest rate adjustments. Manufacturing and trade data from China is key for Asian markets as China’s exports are expected to increase by 5.1% YoY. Market participants should pay attention to such data as it affect not just China’s markets but Asia region as well.
This week’s corporate earnings mainly focuses on US Nio as investors flooded into buying Nio last week amid optimism that the company’s EV deliveries could hit record levels this month while analysts are also upbeat about Nio. From Hong Kong, Meituan is releasing its earnings where investors are laying eyes on its earnings to take it as a forward guidance due to Meituan being the biggest operator of commercial delivery drones.
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. As CFD is traded on margin, there is a risk of losing more than your initial deposit amount and traders need to adopt proper risk assessment and management to determine if CFD is the product for you.
EUR/USD: Potential Bearish Continuation By Jun Yuan Kwong
Key Entry Price Pivot(s)
- 1.0787
Recommended Trade
- Short at level 1.0787
- Take Profit at 1.0692
- Stop loss at 1.0900
Alternative Case
- Long at level 1.0900
- Take profit at 1.0990
- Stop loss at 1.0787
Remarks
- Observing the daily chart of the EUR/USD, we can see that the price is in a downtrend channel.
- Currently, the price is rejecting the channel’s resistance, and a micro double top has formed. This suggests the price may extend towards the channel’s support.
- A significant bearish bar formed on May 29th, but there was no follow-through bar the next day. The price experienced a 50% pullback to the previous bearish bar when it hit a support level at 1.0800.
- We can potentially look for a short trade if the price breaks the support level at 1.0800 and the low of the previous bull bar on the May 30th.
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.
You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at www.poems.com.sg) before trading in this product. Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract. This advertisement has not been reviewed by the Monetary Authority of Singapore.
CFD Disclaimer
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 qualified 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. You are advised to read the trading account Terms & Conditions and Risk Disclosure Statement (available online at https://www.poems.com.sg/) before trading in this product.
Any CFD offered is not approved or endorsed by the issuer or originator of the underlying securities and the issuer or originator is not privy to the CFD contract.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
This material is intended for general circulation only and does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should seek advice from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products.
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.
