Asian Open Traders Lay in Wait ahead of US Earnings and CPI

US futures

Dow futures -0.8% at 31985

S&P futures -0.6% at 3934

Nasdaq futures -0.4% at 12538

In Europe

FTSE -0.46% at 7370

Dax -0.9% at 14850

Nasdaq is set to gain over 5% this week

US stocks point to a lower open after strong gains in the previous session, as the relief rally following the lifeline for First Republic bank starts to reverse.

Yesterday major banks in the US, including Citigroup, Bank of America, Wells Fargo, and JPMorgan teamed together to deposit $30 billion of uninsured deposits into First Republic Bank, a regional lender which had suffered following the collapse of SVB.

The move had initially boosted confidence in the financial sector helping the Dow Jones rise 1.1% yesterday. However, those gains are not being extended today. Still, US equities are on track for a solid week. The Nasdaq is set to gain 5.2% this week it’s the best week since November. Meanwhile, the S&P 500 is on track to rise 2.6% this week its best weekly performance since January.

The turmoil in the financial sector has seen investors reprice Federal Reserve rate hike expectations. Many investors are now expecting a 25% basis point rate hike next week, down from a 50 basis point rate hike that had been widely expected just over a week ago.

Looking ahead, on the economic calendar, University of Michigan consumer sentiment is expected to hold steady in March at 67, which is a 13 month high.

Corporate news

FedEx trades 11% higher premarket after beating quarterly earnings expectations and upwardly revising its 2023 earnings forecast. EPS was $3.41, well ahead of the $2.73 forecast as the cost-cutting programme brings results.

Nvidia try its higher pre-market after Morgan Stanley upwardly revised its stance on the chip maker to overweight from equal weight amid rising excitement surrounding AI.

Where next for the Nasdaq?

The Nasdaq rebounded off the 100 sma and has pushed above the 250 sma trading at a monthly high. The break above resistance at 12500, plus the 50 sma crossing above the 200 S ma in a golden cross formation and the RSI above 50, keep buyers hopeful of further gains. Buyers will look to break above resistance at 12900, the 2023 high in order to bring 13200, the Aug 26 high into play. On the flipside, the port can be seen at 12200, the December high, with the breaks below here exposing the 200 sma at 11900.

FX markets – USD falls, EUR, GBP rises

The USD is falling as investors continued to digest the turmoil that has been unleashed across the financial markets this week The US dollar hasn't been attracting safe-haven flows. Instead, investors are questioning whether the Fed will adopt a less aggressive approach to rate hikes, pulling the dollar lower.

EUR/USD is rising capitalising on the weaker U.S. dollar as investors continue to digest the 50 basis point rate hike from the ECB on Thursday. The central bank acknowledged the stress in the financial sector and said some individual institutions could be adversely affected by higher rates. There was no guidance as to what the ECB could do at the next meeting, instead saying the decision will be data-driven.

GBP/USD is edging higher as investors look ahead to next week’s Bank of England monetary policy meeting. The meeting comes after chancellor Jeremy Hunt announced in the budget that he will pump an additional 20 billion into the UK economy, which could encourage the central bank to continue hiking rates. UK inflation remains in double digits but is expected to fall to 2.9% by the end of the year.

EUR/USD +0.08% at 1.0620

GBP/USD +0.2% at 1.2130

Oil rises but remains below $70

Oil prices are pushing higher for a second straight day, but are still set to record a steep loss across the week, marking the largest weekly fall since December.

Oil remains below $70 a barrel as it continued to hover around a 15-month low. Oil prices have been pressurised this week by the turmoil in the financial sector, raising fears of another financial crisis hitting the demand outlook.

Oil prices to appear to have found a bottom and are attempting to grind higher. As OPEC representatives pointed out, this week’s price weakness is owing to financial drivers rather than any fundamental change to supply and demand imbalances. According to OPEC sources, expectations are for the oil market to stabilise.

Meanwhile, optimism surrounding China's demand recovery continued to support the oil demand outlook. US crude exports to China headed towards their highest level in almost 2 1/2 years this month.

 

WTI crude trades +0.6% at $67.50

Brent trades at +0.2% at $73.80

Learn more about trading oil here.

Looking ahead

15:00 US Michigan consumer sentiment

US futures

Dow futures -0.8% at 31985

S&P futures -0.6% at 3934

Nasdaq futures -0.4% at 12538

In Europe

FTSE -0.46% at 7370

Dax -0.9% at 14850

Learn more about trading indices

Nasdaq is set to gain over 5% this week

US stocks point to a lower open after strong gains in the previous session, as the relief rally following the lifeline for First Republic bank starts to reverse.

Yesterday major banks in the US, including Citigroup, Bank of America, Wells Fargo, and JPMorgan teamed together to deposit $30 billion of uninsured deposits into First Republic Bank, a regional lender which had suffered following the collapse of SVB.

The move had initially boosted confidence in the financial sector helping the Dow Jones rise 1.1% yesterday. However, those gains are not being extended today. Still, US equities are on track for a solid week. The Nasdaq is set to gain 5.2% this week it’s the best week since November. Meanwhile, the S&P 500 is on track to rise 2.6% this week its best weekly performance since January.

The turmoil in the financial sector has seen investors reprice Federal Reserve rate hike expectations. Many investors are now expecting a 25% basis point rate hike next week, down from a 50 basis point rate hike that had been widely expected just over a week ago.

Looking ahead, on the economic calendar, University of Michigan consumer sentiment is expected to hold steady in March at 67, which is a 13 month high.

Corporate news

FedEx trades 11% higher premarket after beating quarterly earnings expectations and upwardly revising its 2023 earnings forecast. EPS was $3.41, well ahead of the $2.73 forecast as the cost-cutting programme brings results.

Nvidia try its higher pre-market after Morgan Stanley upwardly revised its stance on the chip maker to overweight from equal weight amid rising excitement surrounding AI.

Where next for the Nasdaq?

The Nasdaq rebounded off the 100 sma and has pushed above the 250 sma trading at a monthly high. The break above resistance at 12500, plus the 50 sma crossing above the 200 S ma in a golden cross formation and the RSI above 50, keep buyers hopeful of further gains. Buyers will look to break above resistance at 12900, the 2023 high in order to bring 13200, the Aug 26 high into play. On the flipside, the port can be seen at 12200, the December high, with the breaks below here exposing the 200 sma at 11900.

FX markets – USD falls, EUR, GBP rises

The USD is falling as investors continued to digest the turmoil that has been unleashed across the financial markets this week The US dollar hasn't been attracting safe-haven flows. Instead, investors are questioning whether the Fed will adopt a less aggressive approach to rate hikes, pulling the dollar lower.

EUR/USD is rising capitalising on the weaker U.S. dollar as investors continue to digest the 50 basis point rate hike from the ECB on Thursday. The central bank acknowledged the stress in the financial sector and said some individual institutions could be adversely affected by higher rates. There was no guidance as to what the ECB could do at the next meeting, instead saying the decision will be data-driven.

GBP/USD is edging higher as investors look ahead to next week’s Bank of England monetary policy meeting. The meeting comes after chancellor Jeremy Hunt announced in the budget that he will pump an additional 20 billion into the UK economy, which could encourage the central bank to continue hiking rates. UK inflation remains in double digits but is expected to fall to 2.9% by the end of the year.

EUR/USD +0.08% at 1.0620

GBP/USD +0.2% at 1.2130

Oil rises but remains below $70

Oil prices are pushing higher for a second straight day, but are still set to record a steep loss across the week, marking the largest weekly fall since December.

Oil remains below $70 a barrel as it continued to hover around a 15-month low. Oil prices have been pressurised this week by the turmoil in the financial sector, raising fears of another financial crisis hitting the demand outlook.

Oil prices to appear to have found a bottom and are attempting to grind higher. As OPEC representatives pointed out, this week’s price weakness is owing to financial drivers rather than any fundamental change to supply and demand imbalances. According to OPEC sources, expectations are for the oil market to stabilise.

Meanwhile, optimism surrounding China's demand recovery continued to support the oil demand outlook. US crude exports to China headed towards their highest level in almost 2 1/2 years this month.

 

WTI crude trades +0.6% at $67.50

Brent trades at +0.2% at $73.80

Learn more about trading oil here.

Looking ahead

15:00 US Michigan consumer sentiment