Skip to content

CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. CFDs are leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved.

All eyes on US CPI data ahead: S&P 500, Hang Seng Index, Silver

US equity indices kickstart the new trading week on a positive footing, but much remain up in the air as all eyes fall on the US CPI release ahead.

Source: Bloomberg

Market Recap

US equity indices kickstart the new trading week on a positive footing, as a pause in Treasury yields’ ascent ahead of the key US Consumer Price Index (CPI) data aided to drive a broad-based recovery, notably in big tech stocks. The energy sector is the only outlier (-0.60%), being forced into negative territory on lower oil prices, as Biden Administration’s plans to sell 26 million barrels of crude oil from its Strategic Petroleum Reserve gave rise to an increased-supplies outlook. The US dollar remained in its ranging pattern despite a 0.6% decline overnight, largely on some wait-and-see for the US CPI to provide any added boost.

On the economic calendar, the New York Federal Reserve’s (Fed) survey saw US consumers' one-year inflation expectation staying unchanged at 5% in January, while markets were not given a break from hawkish Fedspeak. Fed Governor Michelle Bowman continued to echo for more rate increases overnight but no specifics on peak rate was given. Much will still depend on the upcoming US CPI data to sway market rate expectations. Matching or below-estimate readings could see risk environment improve further (core inflation expected at 5.5% year-over-year (YoY), headline expected at 6.2% YoY), while any upside surprise will see the US dollar rallying higher and equities lower.

The S&P 500 continues to trade on a series of higher highs and higher lows since October 2022, providing an overall upward bias on the broader trend. On the upside, the 4,200 level will stand as resistance to overcome, where the index failed to break above at the start of the month. Overcoming this level could leave the 4,310 level in sight, where a key 61.8% Fibonacci retracement level resides. On the downside, the key psychological 4,000 level will be in focus as near-term support.

US 500 Source: IG charts

Asia Open

Asian stocks look set for a positive open, with Nikkei +0.66%, ASX +0.35% and KOSPI +0.50% at the time of writing. Sentiments are largely tracking the positive handover from Wall Street overnight, although much is still up in the air, with the upcoming US CPI likely to drive sentiments for the weeks ahead. The Nasdaq Golden Dragon China Index (+2.6%) got a lift overnight as well. The Hang Seng Index is attempting to stabilise after recent profit-taking activities, currently sitting at a 38.2% Fibonacci retracement level at the 20,900 level. A break below an upward trendline provides a mixed view for short-term moves however, with further retracement likely to leave the 19,200 level on watch for any formation of a higher low.

Hong Kong HS50 Source: IG charts

Economic data this morning left markets with a disappointing fourth-quarter Gross Domestic Product (GDP) data out of Japan, with the preliminary reading coming in below expectations at 0.2% quarter-on-quarter (0.5% consensus). The data is supportive of a lower-for-longer stance from the Bank of Japan (BoJ) and for any tighter shift in policy moves towards the second half of the year, a more gradual transition will likely be on the table. The Nikkei 225 index has seen some downward pressure on the data release but continues to hang just below its 27,650 level of resistance. Any subsequent push above the level could potentially pave the way to retest the 28,400 level next.

On the watchlist: Silver prices hanging at key $22.00 support ahead of US CPI data

Silver prices have been struggling to find upside on some resilience in the US dollar lately, following a break below a previous consolidation pattern back in early February. The moving average convergence/divergence (MACD) has also headed into negative territory for the first time since November 2022, potentially reflecting some reversal in momentum to the downside. With the US CPI up ahead, muted moves to start the week reflect some wait-and-see as prices hang at its key $22.00 level of support. Failure to hold above the $22.00 level over the coming days could pave the way to retest the $20.80 level next, where a key 38.2% Fibonacci retracement level resides.

Spot Silver Source: IG charts

Monday: DJIA +1.11%; S&P 500 +1.14%; Nasdaq +1.48%, DAX +0.58%, FTSE +0.83%

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.

Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access
Learn more

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Tuesday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

<h3>How much does trading cost?</h3>
<h3>Find out about IG</h3>
<h3>Plan your trading</h3>

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.