TRADING SIGNALS: US FEDERAL RESERVE MEETING
On June 14, a meeting of the US Federal Reserve System, the body that performs the functions of the Central Bank of America, will take place. The decision on the interest rate will determine the further movement of the market, which draw attention of traders.
How the interest rate situation will develop now, our expert explain:
The Fed may keep the rate at the current level of 5.25% amid falling inflation in the US economy, but will lower GDP forecasts for the next two years and also signal to traders that they should not expect interest rates to fall in the second half of the year, as inflation risks have not gone anywhere. On Wednesday consider buying USDTRY, USDZAR and selling #NQ100, #SP500, #Coinbase.
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IN AND OUT, 5 MINUTES TRADING
Who'd want to spend a good day, staying in a stuffy room staring at the screen? Especially when all you need is 5 minutes and a good plan. This time we'll be looking at a simple, yet a profitable intraday strategy for everyone.
Join us on June 14 at 12:00 GMT.
During webinars, FreshForex analyst will answer your questions regarding the market situation and comment on the latest news.
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PER ASPERA: RECORD PERFORMANCE BY THE NASDAQ AND S&P500
On Monday the S&P 500 and Nasdaq rose to their highest closing levels since April 2022, while Oracle hit a record high ahead of quarterly results as investors await inflation data and the Federal Reserve's interest rate decision this week. Thanks to gains by market heavyweights Amazon, Apple and Tesla, the S&P 500 has now recovered 21% from its October 2022 lows. Some investors say Wall Street is in the midst of a bull market.
Tesla is up 2.2% and has now risen for 12 consecutive trading sessions, a record for the electric car maker.
Apple and Microsoft are up about 1.5% each, and the two tech companies' shares have gained 41% and 38% year-to-date respectively.
The S&P 500 rose 0.93% to end the session at 4,338.93 points.
The Nasdaq rose 1.53% to 13,461.92 points and the Dow Jones Industrial Average rose 0.56% to 34,066.33 points.
Rising shares of the biggest companies, better-than-expected quarterly earnings and hopes that the Fed is nearing the end of its monetary tightening cycle have lifted the indices in recent weeks.
The recent rally has widened to include more sensitive sectors such as energy and industrials, as well as small-company stocks, as data continues to suggest the US economy is resilient despite higher interest rates.
0 OR 1? FORECASTS ABOUT THE FED'S UPCOMING RATES
The US Federal Reserve will not raise interest rates for the first time in more than a year at its June 13-14 meeting, according to economists polled by Reuters, but a significant minority expect at least one more rate hike this year as the economy remains resilient.
Fed Chairman Jerome Powell signalled in May that the US central bank may soon pause its rate hike cycle to assess the impact of a historically aggressive 500 basis point tightening, raising rates at every meeting since March 2022.
More than 90% of economists, 78 out of 86 surveyed from 2-7 June, believe the Federal Open Market Committee will hold the federal funds rate at 5.00%-5.25% at the end of next week's meeting. The remaining eight expect a 25 basis point rate hike.
Since the last Fed meeting in May, strong economic data and comments from several Fed officials have prompted markets to assume a rate hike at or before the July 25-26 meeting, with previous expectations of a rate cut later this year quickly easing.
This hawkish change in market expectations has helped lift the US dollar to its highest level since March.
The problem is that inflation is not falling fast enough — in April it was 4.4% on the Fed's preferred target and 4.7% excluding volatile food and energy prices. The central bank's inflation target is 2%.
More than a third of survey participants, 32 of 86, believe the Fed will raise rates at least once more this year, including eight who say it will happen in June and 24 who expect a rate hike in July after a pause. Only one predicts a rate hike in both June and July.
Just over 25% of economists, 23 out of 86, predict at least one Fed rate cut before the end of 2023, but this is down from 28% in the previous survey. Markets estimate the probability of a rate cut this year at around 60%.
Less than 60% of respondents to an additional question, 28 of 48, said the world's biggest economy will fall into recession this year, down from more than 70% in a survey conducted just a few weeks ago.
Investors withdrew about $1.43 billion from cryptocurrency exchange Binance and its US subsidiary as of 11am Eastern Time (1500 GMT) on Tuesday, data provider Nansen reported, a day after a leading US regulator sued both exchanges.
Binance recorded a net outflow of $1.34 billion in cryptocurrency tokens on the ethereum blockchain, while its US subsidiary, Binance.US, recorded a net outflow of $70.8 million, Nansen said on Twitter.
On Monday, the US Securities and Exchange Commission (SEC) sued Binance, its CEO Changpeng Zhao and operator Binance.US over what it called a "web of deception" to circumvent US laws.
In 13 charges, the SEC alleges that Binance artificially inflated trading volumes, diverted customer funds, failed to restrict US customers' access to its platform and misled investors about market controls.
The lawsuit is the SEC's most significant move against a cryptocurrency company in a major crackdown on the industry this year.
Binance says it is cooperating with the SEC and is "making every effort to answer their questions and address their concerns", including trying to reach a negotiated settlement. "We intend to vigorously defend our platform," the company said in a blog post.
The SEC complaint is the latest in a string of legal challenges for Binance. In March, the US Commodity Futures Trading Commission (CFTC) sued the company for operating an "illegal" exchange and a "bogus" compliance programme.
Zhao said the CFTC's claims were an "incomplete statement of facts".
Another major exchange has encountered similar problems. The SEC filed a lawsuit against Coinbase, accusing it of operating illegally without registering with the regulator. In a complaint filed in federal court in Manhattan on Tuesday, the SEC said Coinbase had been operating as an unregistered broker since at least 2019, conducting cryptocurrency transactions while evading disclosure requirements designed to protect investors.
Global regulators are keeping a close eye on the cryptocurrency world after a series of high-profile crashes wiped out more than a trillion dollars from the market capitalisation of the digital asset industry last year.
Bitcoin has stabilised after yesterday's drop of more than 5 %, its biggest daily drop since 19 April. The world's biggest cryptocurrency last stood at $26,300, up 3.85 per cent for the day.
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