The market has experienced plenty of during this morning’s Asian session, which usually tends to see less movement. The US dollar price had gained throughout the day yesterday but fully corrected this morning.
According to Bloomberg, the US Dollar is likely to continue seeing a decline up to the Federal Fund Rate and . Investors are uncertain whether the Fed will indicate a change in policy after another consecutive rate hike.
This morning’s main news, which is the cause of most of the volatility, is the news from China. It is speculated that China will form a committee to end the current “Zero-COVID” policy, which has been a continuous strain on growth over the past 12 months.
The (Hong Kong) has increased by 6.30%, and the Index (China) has increased by 2.65%. However, investors should remember that these reports have not been officially confirmed. Still, we can see how speculation has driven the price.
Furthermore, continues to improve as the US Dollar struggles. Over the past five days, Bitcoin increased by 1.55%, bringing the price up to $20,600. Experts advise that the purchase of Twitter by Elon Musk has supported the cryptocurrency industry.
As the world’s richest man and known cryptocurrency supporter, Elon Musk is rumored to have plans to add more crypto features on Twitter. The company has already advised that it will soon release a new feature that allows users to buy and sell NFTs.
The total market capitalization of the cryptocurrency market has increased over the past two weeks and has almost crossed the $1 trillion mark.
Lastly, this afternoon investors will be waiting for the release of the latest US and JOLTS . Investors are mainly looking to see if the employment sector is continuing to show signs of a slowdown.
Dow Jones
The continues to be the best-performing US Index and has increased by 0.37% during this morning’s futures session. Over the past month, the Dow Jones has increased by 11%, much higher than the , which has only increased by just over 5%. This morning the equity market is performing well across the board, including in Europe.
The is up 0.77%, 0.55% and the (France) is up almost 0.80%. This is partially due to the speculated re-opening of China, which significantly increases demand and solves supply disruptions issues but also expectations that monetary policy may pivot in December.
When looking at technical analysis, we can see that the price of the Dow Jones is above all major moving averages and the volume-weighted average price. This indicates that the price is expected to rise. However, traders are concerned that the price is still very close to being overbought on the RSI.
The price is also overbought on other indicators, such as the Stochastic Oscillator, but traders are also concerned that the price is at a significant previous resistance point. This resistance point has triggered a decline on two previous occasions.
The price of the Dow Jones has been supported by the earning season, where we can see stronger consumer demand in some sectors. The price is also being supported by expectations that global Central Banks will change their policy very soon. Most economists believe the Federal Fund Rate will reach 4.5% before the Central Bank takes a “wait and see” stance.
However, economists have advised that investors shouldn’t price the stock market purely on interest rate hikes. The stock market may still be pressured by weaker economic activity, the cost of debt, and higher .
In the meantime, investors will be focusing on comments made by the FOMC tomorrow and the remaining earnings reports.
