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Daily Morning Summary: July 12,2023 Forex trading for beginners

A traders finance market update brought to you by

In this summary, we will provide aspiring forex traders with an overview of the key market developments, news, and insights that can impact your forex trading activities. Stay informed and make well-informed trading decisions by following our daily updates, forex trading for beginners.

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Yesterdays highlight was the stock market's positive finish ahead of an anticipated slowdown in inflation. The S&P 500 and Dow Jones Industrial Average posted gains, driven by energy producers and the approval of Microsoft Corp.'s takeover deal with Activision Blizzard Inc. Investor expectations for the core CPI report are leaning towards a lower consensus, while the upcoming earnings season and policy cues will be critical in sustaining equity valuations.

The US dollar weakened against other major currencies as traders speculated on the potential end of the Fed's tightening cycle and awaited the US inflation report. Oil prices steadied, supported by signs of declining Russian crude production and a weaker dollar.

Chump Profit Daily Forex Morning Trading Summary: July 12, 2023

The S&P 500 Bar chart showing forex and commodities prices, green/red candles depict daily trading trends. Includes moving average, Bollinger bands, and RSI.

1. Inflation Data and Market Outlook:

- The stock market closed higher as investors anticipated a report showing a slowdown in inflation, which would influence the Federal Reserve's future actions.

- The S&P 500 crossed the 4,400 level, and the Dow Jones Industrial Average gained nearly 1%.

- Energy producers led the gains, with West Texas Intermediate oil surpassing its 100-day moving average.

- Activision Blizzard Inc. saw a 10% surge as Microsoft Corp. received court approval for its $69 billion takeover deal.

black section of a computer keyboard, with black keys and one key stands out, Microsoft logo,  4 squares

2. CPI Expectations:

- A survey by 22V Research revealed that 65% of respondents believe the core Consumer Price Index (CPI) will be lower than consensus, excluding food and energy prices.

- 54% of investors polled expect a "risk-on" sentiment based on the upcoming CPI report.

- If economic data continues to indicate a soft landing, investors may reallocate to risk assets.

3. Inflation Outlook and Fed Policy:

- Forecasters surveyed by Bloomberg expect the year-over-year rate of core inflation to moderate to 5%.

- Despite the expected slowdown, the Fed is widely anticipated to resume interest-rate increases later this month with a quarter-point hike on July 26.

- The upcoming CPI release will have a more significant impact on the September/November debate regarding further rate hikes.

4. Inflation and Equity Performance:

- Historically, equity gains have followed inflation peaks, which have resulted in double-digit gains in the stock market.

- The S&P 500 has gained over 20% since its October low and around 15% since the peak CPI data release last year.

5. Second-Quarter Earnings Season:

- Traders will shift focus to the upcoming second-quarter earnings season, with JPMorgan Chase & Co., Citigroup Inc., and Wells Fargo & Co. reporting their numbers on Friday.

- Gains in the S&P 500 have been concentrated among its largest stocks, leading to expensive valuations for these companies.

- The earnings season and policy cues will play a crucial role in determining whether these valuations can be sustained.

6. Dollar Weakens Ahead of Inflation Data:

- The US dollar fell to its lowest level in three months before the release of the US inflation report.

- Expectations of the Fed reaching the end of its rate-hiking cycle and a potential cooling of US CPI are reinforcing bearish dollar bets.

- Traders are trimming their long dollar positions in carry trades.

Dollar Index , DXY, Bar chart showing forex and commodities prices, green/red candles depict daily trading trends. Includes moving average, Bollinger bands, and RSI.

7. Strength in Other Currencies:

- Other Group-of-10 currencies experienced a resurgence, contributing to the dollar's losses.

- The yen strengthened beyond the 140 per dollar level, while the pound is rising toward 1.30 as traders anticipate more Bank of England rate hikes.

8. Changes in Australian Central Bank Meetings:

- The Reserve Bank of Australia announced plans to reduce the number of monetary policy meetings from 11 to 8 per year, with longer meeting durations.

- These changes will allow the board to examine issues in detail, discuss alternative policy options, and communicate decisions effectively.

9. Oil Prices:

- Brent crude oil remained steady near the $80 per barrel mark, which was last breached in early May.

- Russian crude production may finally be declining, as shown by reduced shipments through Russia's western ports.

- A weaker dollar and anticipation of the US CPI report influenced commodity prices, including oil.

- OPEC+ supply cuts and a tightening global market are expected to support oil prices.

WTI, Crude oil, Bar chart showing forex and commodities prices, green/red candles depict daily trading trends. Includes moving average, Bollinger bands, and RSI.

10. Upcoming Oil Market Reports:

- The Energy Information Administration (EIA) will release its weekly report on US crude stockpiles.

- The American Petroleum Institute reported a 3 million barrel rise in inventories last week.

- Traders will also closely watch the monthly reports from the International Energy Agency (IEA) and OPEC for insights into the global oil market.

Please note that the forex market is highly volatile, and traders should perform their own analysis and exercise caution when making trading decisions.

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Stay ahead in your forex trading journey by following Chump Profit for daily updates, news, and insights. Subscribing to our platform will provide you with valuable information and analysis to make informed trading decisions. Join us and maximise your trading potential with Chump Profit!

Disclaimer: Trading in the forex market involves risks and should be done with caution. The information provided in this summary is for informational purposes only and should not be considered financial advice. Always conduct your own research and consult with a professional advisor before making any investment decisions.


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