Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

Malaysian palm oil futures saw a significant increase for the second consecutive session on Tuesday, with the benchmark palm oil contract for July delivery on the Bursa Malaysia Derivatives Exchange climbing by 66 ringgit, or 1.67%, to 4,010 ringgit ($839.61) per metric ton by midday. This could be due to adverse weather conditions in Malaysia, which have hampered palm yields, and strong export data that buoyed market sentiment.

Impact of Hot Weather and Export Trends

Weather patterns play a crucial role in the cultivation of palm oil, with optimal conditions required for maximum yield. The Malaysian meteorological agency’s issuance of Level 1 hot weather alerts in over 10 areas on Monday evening underlines the environmental challenges faced by palm oil production. Concurrently, Malaysia’s position as a leading palm oil exporter is bolstered by expectations of recovery in shipments from Indonesia, following lower-than-average exports in the previous months.

Influence of Global Oil Prices and Currency Fluctuations

The dynamics in related oil markets also play a critical role. On Tuesday, Dalian’s most-active soyoil contract surged by 2.52%, and its palm oil contract rose by 2.09%. Additionally, soy oil prices on the Chicago Board of Trade increased by 0.92%, influenced by concerns over Argentine crops and geopolitical tensions impacting Ukrainian grain ports. These movements in related oils, which compete in the global vegetable oil market, indirectly affect palm oil pricing.

Furthermore, the slight weakening of the Malaysian ringgit by 0.02% against the dollar could have nuanced effects on export pricing and profitability. Meanwhile, firmer crude oil prices enhance palm oil’s appeal as a biodiesel feedstock, linking its fortunes to broader energy market trends.

Malaysian Export Tax and Pricing Strategies

The Malaysian government’s decision to maintain an 8% export tax for crude palm oil and to adjust the reference price further shapes the market landscape.

Such fiscal and regulatory measures are crucial in framing the economic environment for palm oil trading.

Technical Analysis and Price Movements

From a technical perspective, predictions by LSEG and Reuters analyst Wang Tao suggest potential resistance levels for palm oil prices around RM3,990-4,000 per ton, with support levels expected at RM3,840-3,860 per ton. Wang Tao forecasts a possible rise to around 4,039 ringgit per ton, reflecting the upper boundary of a predicted trading wave.

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ICYMI: Market summary for today, 23 April 2024

As the financial markets gear up for the release of the U.S. Personal Consumption and Expenditure series this Friday, the EUR/USD pair remains steady. With the pair approaching a 5-month low, traders are keeping a keen eye on any signals that could dictate short-term market directions. Historically, the lead-up to such data releases has seen increased volatility in forex markets. A cautious forecast suggests that if inflation data reports higher than expected, it could reinforce the dollar’s position, pressuring the EUR/USD pair further.

Interest Rate Dynamics and Euro Challenges

With the European Central Bank (ECB) potentially cutting interest rates as early as June—a move that might precede the Federal Reserve’s actions—the disparity in interest rates between the Eurozone and the U.S. could widen.

Such a scenario historically leads to a weaker Euro as investors seek higher returns in dollar-denominated assets. Given the persistent lower rates in the Eurozone, the Euro faces substantial headwinds.

For traders, understanding the nuances of ECB vs. Fed policies will be crucial. The expected ECB rate cut might offer short-term trading opportunities in EUR/USD pairs, as market reactions to policy differentials are typically swift and pronounced.

European-US Dynamics

Mild improvements in geopolitical stability, particularly between Israel and Iran, have provided some support to risk-sensitive currencies like the Euro. However, this support is often temporary, as fundamental economic indicators tend to have a more lasting impact. Traders should monitor these developments closely but prioritize economic data in their analysis.

The robust growth and persistent inflation in the U.S. continue to bolster the dollar. These economic conditions suggest a stronger dollar moving forward, unless unexpected economic data suggests a slowdown. The strength of the dollar is a crucial factor for EUR/USD traders, as it directly impacts pair dynamics.

While upcoming data releases like Germany’s Purchasing Managers Index (PMI) and the ifo Business Climate Index (IBCI) are crucial, their impact may be overshadowed by U.S. data given the current market focus. Investors might find these indicators less influential in the short term unless they deviate significantly from expectations.

What is the Impact of Upcoming Tech Earnings Reports?

Recent downgrades by UBS Investment Bank, particularly Jonathan Golub’s adjustment of major tech stocks like Apple, Alphabet, and Nvidia from Overweight to Neutral, reflect a broader sentiment shift. The largest weekly market cap loss recorded by this group underscores the volatility and potential revaluation of tech giants. Nvidia’s drastic drop, reminiscent of its March 2020 plummet, signals market nervousness, albeit with a partial rebound indicating some underlying resilience.

While individual tech giants may face slowed momentum, the broader tech sector still holds promise. This differentiation in sector versus individual stock performance can guide investors looking to diversify within tech. Furthermore, with other S&P 500 companies expected to see an earnings increase of 17%, there appears to be a redistribution of growth potential within the market.

The forthcoming earnings reports from Tesla, Meta, Microsoft, and Alphabet are highly anticipated, with potential to significantly influence market sentiments. Historical data suggests that unexpected outcomes in these reports can lead to substantial market movement – all which can potentially serve as opportunities for traders.

As fears of an escalation in the Middle East subside, investors are shifting away from safe-haven assets, resulting in a boost to global equities. The MSCI global stock index (EURONEXT:IACWI) saw an increase of 6.01 points or 0.81%, reaching 749.29. Wall Street mirrored this positive sentiment, with the Dow Jones Industrial Average (DJI) climbing by 253.58 points or 0.67% to 38,239.98, the S&P 500 (SPX) advancing 43.37 points or 0.87% to 5,010.60, and the Nasdaq Composite (IXIC) rising by 169.30 points or 1.11% to 15,451.31.

Gold, Bonds Prices Under Pressure

Conversely, spot gold fell sharply by 2.59% to $2,328.65 an ounce, marking its most considerable one-day drop since June 2022. U.S. gold futures also saw a decrease of 2.8%, settling at $2,346.4. In the bond market, yields, which move inversely to prices, were generally trending towards multi-month highs. The U.S. 10-year Treasury note yield slightly decreased by 0.2 basis points to 4.613%, whereas the 30-year bond yield edged up by 0.6 basis points to 4.7168%.

Earnings Season and Market Sentiment

With over 150 companies from the S&P 500 and 173 companies from the STOXX 600 scheduled to report first-quarter results, investor focus is sharply on earnings. Notably, eyes are on major U.S. tech giants like Microsoft and Alphabet, especially following Nvidia’s 10% plunge on Friday.

In commodities, the FTSE-100 in London, heavy with resource stocks, rose 1.62% nearing record highs as tin and nickel prices reached multi-month peaks. Additionally, Portuguese stocks surged over 3% led by oil company Galp Energia, which soared about 20% after optimistic reports about a significant oil field off Namibia.

Shifts in Currency and Oil Markets

The dollar index slightly gained by 0.03% at 106.13, reflecting a steady position amid global uncertainties. In the oil sector, both Brent and West Texas Intermediate crude saw modest declines, each dropping by 29 cents to $87.00 and $82.85 a barrel, respectively, as market focus returned to fundamental supply and demand dynamics.

Interest rate expectations are also affecting market movements, particularly in the U.S., where traders are speculating about potential rate cuts by the Federal Reserve, possibly as early as July, with a more likely scenario in September. This anticipation is echoed in the movements of the two-year Treasury note yield, which rose slightly by 0.2 basis points to 4.9713%.

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Geopolitical Concerns Drive Oil Price Increase in Asian Trading

Oil prices witnessed an increase in Asian trading on Tuesday, reflecting a reversal from the downturn observed in the previous session. This change underscores the market’s ongoing vigilance concerning geopolitical developments in the Middle East. Specifically, Brent crude futures saw a rise of 39 cents, reaching $87.39 a barrel, and West Texas Intermediate crude also gained 40 cents, priced at $82.30 a barrel, as of 0033 GMT.

This uptick was followed by despite a decline caused by easing tensions on Monday, where both benchmarks fell by 29 cents. This decline was influenced by perceptions that the recent intensification of tensions between Israel and Iran had minimal immediate effects on the oil supply dynamics from the region. Despite this, the lingering uncertainties continue to foster a cautious market sentiment, emphasizing the potential for continued volatility.

U.S. Sanctions on Iran’s Oil Sector Heighten Global Supply Concerns

A critical aspect contributing to this volatility is the U.S. decision to expand sanctions on Iran’s oil sector. This move encompasses penalties not just on Iran but also on any foreign entities like ports, vessels, and refineries that facilitate the processing or transportation of Iranian crude. This development hints at a broader enforcement landscape which could disrupt some supply lines or alter trade routes, potentially exerting upward pressure on prices if significant disruptions occur.

Geopolitical Trends Signal Potential Challenges for Oil Prices

The ongoing geopolitical narrative, while having eased momentarily in terms of direct market impact, maintains a trend that has been escalating since last October. Analysts from Barclays have expressed concerns over these developments, suggesting that while the immediate threat to oil markets may have subsided, the persistent elevation in geopolitical risk poses an underlying threat to stability.

Their forecast for Brent crude remains around $90 a barrel for the year, acknowledging that risks are tilted towards the higher end of the spectrum.In the immediate term, market participants are also focusing on the anticipated data regarding U.S. crude oil and refined product inventories. Expectations lean towards an increase in crude inventories and a decline in refined product stockpiles. Such trends typically suggest a slowing demand for end products, which could counterbalance any upward price pressures from geopolitical tensions.

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On Monday, the FTSE 100 increased by 1.1%, and the FTSE 250 saw a rise of 0.8%, reflecting a positive shift in investor sentiment after last week’s downturn. This uptick marks the most significant monthly gain for both indexes, highlighting a rebound as concerns about the Middle East conflicts wane.

As tensions de-escalate, investors seem more willing to take on risk, moving away from safer, low-yield investments. Historical patterns suggest that such rebounds could be sustainable if geopolitical stability continues.

Energy Sector Shows Resilience

Conversely, the energy sector experienced a 0.7% increase despite a drop in oil prices over 1%. This resilience in the face of falling oil prices might suggest underlying strength or optimism in the sector’s outlook, perhaps due to diversification efforts or adaptive business strategies.

Easing Gold Prices

The precious metals sector faced a decline of 1.2%. This dip came as gold prices fell, a reaction possibly tied to decreased demand for safe-haven assets as tensions in the Middle East appeared to ease.

Tyman Buyout Deal

In individual stock news, Tyman experienced a surge, climbing 29% following news of a successful buyout deal worth $976 million with Quanex Building Products. This deal not only propelled Tyman but also lent momentum to the broader construction sector, which overall advanced nearly 3%.

This move could be part of a bigger trend, and could indicate a renewed strengthening in the sector, possibly leading to increased investor confidence in construction and related industries.

Economic Indicators to Watch Out For

The market’s focus will likely shift towards upcoming economic data, with the UK PMI scheduled for release on Tuesday and the U.S. personal consumption expenditure price index due on Friday. These indicators will provide further insight into the economic landscape and could influence the Bank of England‘s monetary policy decisions, particularly any discussions around rate cuts.

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As we gear up for the release of key economic data from the United States, including Q1 GDP and March Core PCE figures, the financial markets are poised on the edge of their seats. These statistics are critical as they not only shed light on the current economic standing of the U.S. but also have the potential to steer the Federal Reserve’s upcoming decisions on inflation and interest rates.

Economic Data and Currency Impact

In this case, the EUR/USD, USD/JPY, and GBP/USD pairs are especially reactive to U.S. economic forecasts. Any variation from expected GDP and PCE outcomes could lead to volatility in these currency pairs. Historically, unexpected figures in GDP or Core PCE have led to sharp movements in the forex market. For example, a stronger than anticipated economic report tends to bolster the USD against its counterparts.

Easing of Conflict in Middle East

We have already seen how tensions in the Middle East affect the markets.

There appears to be a temporary calm in Middle Eastern tensions, which might contribute to market stability in the short term. If this stabilization persists, it could bolster investor confidence, influencing global market fundamentals positively.

Tech Earnings Season

In the corporate arena, the continued flow of Q1 earnings reports from tech giants like Tesla, Meta, Alphabet, Amazon, and Microsoft will likely play a crucial role in shaping market sentiment. Strong earnings from these firms can uplift the economic outlook, while any disappointments could dampen the mood considerably.

Bank of Japan’s Policy

The Bank of Japan’s upcoming policy decision is also on the radar. Changes in the BoJ’s rate decisions could affect the Japanese yen and ripple through global markets. A dovish stance by the BoJ might weaken the yen but could boost stock prices as cheaper financing becomes more accessible.

Federal Reserve’s Forecasting

In the U.S., the Federal Reserve’s current forecasting methods are under scrutiny. The Fed’s recent revision of growth projections upwards by 0.7 percentage points for 2024 and the acknowledgment of persistent inflation indicate a potential shift away from previously anticipated interest rate cuts. Former Fed Chair Ben Bernanke advocates for a scenario analysis approach, which could provide a more dynamic and comprehensive framework for predicting and communicating potential economic scenarios. This method may decrease market volatility by offering a clearer projection of future economic conditions and policy directions.

Historically, the implementation of such analytical improvements by central banks, as seen in the late 1990s under Greenspan’s Fed, helped in enhancing public understanding and market stability during economic transitions.

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Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact [email protected].

In today’s market roundup, South Korean shares experienced an uplift, notably the KOSPI, which climbed 16.20 points, a 0.63% increase, settling at 2608.06 at 0100 GMT. This rise comes as the finance minister reaffirms the government’s commitment to its corporate reform agenda, dubbed the “Corporate Value-up Programme.”

Government Commitment and Investor Sentiment

Finance Minister Choi Sang-mok’s assurances come at a crucial time, as investors express concerns about the momentum of these reforms following the ruling party’s recent electoral setback. These reforms are aimed at enhancing corporate efficiency and market competitiveness, with specific guidelines expected to be released next month.

The market’s reaction was mixed but generally positive in sectors expected to benefit from the government’s focus on reform. Auto and financial stocks saw appreciable gains with Hyundai Motor and Kia Corp rising 3.62% and 2.63%, respectively. The Finance-major Index and the Securities-minor Index also enjoyed increases of 3.59% and 2.30%.

Tech Underperformance

Conversely, the technology sector faced a downturn, with major chipmakers like Samsung Electronics and SK Hynix recording declines of 1.55% and 3.06%, following a 4.1% drop in the Philadelphia Semiconductor Index. This sector’s volatility reflects broader global tech concerns rather than domestic issues alone.

Currency and Bond Markets

Moreover, the South Korean won edged slightly lower by 0.07% against the dollar, with the onshore settlement standing at 1383.1 per dollar. In the debt market, June futures on three-year treasury bonds saw a slight decrease, while the yields on three-year and ten-year Korean treasury bonds increased, indicating a shift in investor sentiment towards bonds.

The performance of South Korean exports saw an 11.1% increase during the first 20 days of April compared to last year. This indicates resilient export activities, which are crucial for the country’s economic health. Foreign investment trends showed a net sell-off, with foreigners offloading shares worth approximately $109.38 million.

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ICYMI: Market summary for today, 22 April 2024

Gold prices experienced a downturn today, with spot gold dropping by 0.3% to $2,381.36 per ounce early in the GMT morning. Concurrently, U.S. gold futures saw a decline of 0.7%, reaching $2,395.80 per ounce.

These movements are set against a backdrop of increasing U.S. Treasury yields, which edged up to 4.6475%, thereby diminishing the attractiveness of non-yielding bullion to investors.

Impact of U.S. Treasury Yields on Gold

The upward movement in the benchmark 10-year U.S. Treasury yields exemplifies the inverse relationship typically seen between yields and gold prices. Historically, as yields rise, the opportunity cost of holding non-yielding assets like gold increases, leading investors to shift towards yield-bearing assets.

This dynamic is further complicated by persistent inflation and higher-for-longer interest rates, noted as substantial risks to financial stability by the Federal Reserve.

Amidst these economic parameters, geopolitical tensions continue to influence market sentiments. The ongoing conflict in the Middle East keeps investors on edge, potentially increasing gold’s appeal as a safe-haven asset despite the current price decline.

Inflation Concerns and Interest Rate Projections

Comments from Chicago Federal Reserve President Austan Goolsbee indicate that progress on reducing inflation has stalled, suggesting a continued environment of high interest rates.

This situation supports a scenario where gold might not rebound significantly in the short term due to the extended period of elevated rates diminishing its appeal.

Outlook for Other Precious Metals

The broader precious metals market shows mixed signals. Silver, after a significant 26% rise in the recent two months, dropped by 0.6% to $28.48 per ounce, indicating potential for a technical correction despite the momentum.

Platinum dipped slightly by 0.1% to $930.72, whereas palladium remained stable at $1,026.44. The overall robust demand outlook from China and lingering macroeconomic uncertainties suggest that metals like copper and gold might see further gains, though this trajectory could be volatile in light of ongoing economic and geopolitical factors.

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