Welcome to the Weekly Market Recap!
In this edition, we bring you the latest highlights and insights from the world of finance and economics. We cover a range of topics, including major mergers and acquisitions, developments in the tech industry, updates on the global economy, market analysis, upcoming events to watch, and technical analysis of key currency pairs and commodities.
Top Stories of the Week
- UBS Completes Takeover of Credit Suisse: UBS has successfully completed its $3.2 billion takeover of Credit Suisse, following an emergency deal initiated in March. The merger has resulted in UBS’s balance sheet surpassing $1.6 trillion and its workforce expanding to over 120,000 employees. The integration of the two banks’ operating models and the management of operational losses are among the key challenges for UBS.
- General Motors (GM) Joins Tesla’s Charging Network: General Motors is set to adopt Tesla’s charging network, marking a significant step toward establishing a shared charging hardware standard in the North American market. This collaboration comes shortly after Ford’s pledge to use Tesla’s charging plug standard across the US. Investors responded positively to the agreement, leading to a 1.1% increase in GM’s stock.
- Tech Giants Make Headlines: Apple introduced its Pro Vision VR headset at the WWDC event, priced at $3,500. Meanwhile, Netflix saw its stock rise to a 17-month high following a broker upgrade by JPMorgan. The crackdown on password sharing was seen as a revenue booster.
- OPEC+ Cuts Oil Output: Saudi Arabia announced a voluntary cut in oil production of 1 million barrels in July, aiming to support oil prices.
- Eurozone Economy in Recession: The eurozone’s GDP for Q1 2023 and Q4 2022 was revised downward to -0.1%, indicating that the economy has entered a recession.
Market Analysis
- Nasdaq Soars, S&P500 Approaches Bull Market: The Nasdaq index reached a 14-month high, fueled by the AI boom and expectations of the Federal Reserve keeping rates steady. The S&P500 also rose, approaching a bull market threshold, driven primarily by the performance of seven stocks: Tesla, Amazon, Google, Nvidia, Microsoft, Apple, and Meta.
Economic Highlights
- Japan’s Economy Exceeds Expectations: Japan’s GDP grew by 2.7%, surpassing the forecast, largely due to robust spending. Japanese stocks also traded at a 30-year high.
- UK Economy Shows Signs of Resilience: UK GDP data suggests economic growth stalled at 0% MoM in April, while the contraction in March improved. The UK labor market figures were also released.
Upcoming Events to Watch
- Federal Reserve Rate Decision: The Federal Reserve is expected to announce its interest rate decision. The market currently prices in a 65% probability of rates remaining unchanged but potentially increasing in July.
- US CPI Data: US inflation data will be released, providing insight into the cooling trend. Forecasts suggest a decline in CPI to 4.1% and continued higher core inflation. Strong inflation data could impact expectations of a Fed rate hike.
- ECB Rate Decision: The ECB will likely raise interest rates for the eighth consecutive time in its ongoing battle against inflation. Clues about a potential rate hike in September will be closely watched.
- Bank of Japan Rate Decision: The BoJ will announce its interest rate decision after an upward revision of GDP data. Core inflation remains above 4%, indicating potential policy adjustments.
Technical Analysis
We have analyzed the most popular trading pairs and assets, including EUR/USD, GBP/USD, Gold, and US500. Our aim is to provide you with an insightful analysis of their trends and support/resistance levels, which will help you make informed decisions.
EUR/USD
The Euro is gaining strength because the ECB is likely to increase interest rates, bringing them closer to the rates set by the Fed. As a result, the EUR/USD pair is approaching the important resistance level of 1.0800. There may be fluctuations in the market as both the ECB and the Fed make announcements about their policies and the US CPI data is released. The currency dynamics could be affected by factors such as lower energy prices affecting US inflation and concerns about a recession in Europe.
GBP/USD
The GBP/USD is currently going through a correction phase while in a downtrend, and it’s getting closer to a major resistance level at 1.26100. Keep a close eye on it. Additionally, be aware of the upcoming CPI release as it could affect the strength of the USD and could influence Fed Chair Powell’s decisions on rate hikes. If the CPI is higher, the dollar could get stronger, but if it’s lower, it could postpone rate increases.
XAU/USD
XAU/USD is currently rangebound, suggesting it will likely continue trading between support and resistance levels. It is moving sideways, positioned below the 50 SMA. The price is currently stabilizing after a drop, which suggests that there may be a possibility of it decreasing further. There are significant support levels to watch in 1900 and 1890, with the possibility of testing the low at 1934. For a new uptrend confirmation, a breakthrough above 1984 is required.
XUS500
For XUS500, the price continues to exhibit an overall bullish trend, trading within a channel and consistently forming higher highs and higher lows above the 50 SMA. A move below the 50 SMA would challenge the uptrend.
Thank you for reading! Wishing you successful trades ahead!
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