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The U.S. GDP Falls 4.8 Percent in Q1 Seasons

  • DAR Wong
  • 4 May 2020

MARKET OBSERVATIONS – 4 May 2020

 

The U.S. GDP Falls 4.8 Percent in Q1 Seasons

Fundamental Outlook   The advance GDP report for U.S. economy contracted 4.8 percent in Q1 seasons, making worst performance since the 2008 crisis. However, tech stocks like Microsoft and Facebook reported better earnings than expected and lifted the American stock indexes.

The U.S. FED pledges to keep interest rates near to zero benchmark until full recovery and inflation regains 2 percent. On 30 April, Dow benchmark closed at 11.1 percent gains and made best growth in a single month since 1939.

The U.S. weekly claims for jobless benefits ended 25 April filed 3.84 million cases and totalled more than 30 million figure. Consumer spending declined 7.5 percent in March and made the sharpest fall since 1939.

President Trump makes another unfounded comment that he suspects the coronavirus came from a China laboratory in Wuhan China, without citing any evidence. On Friday, more than 3.2 million has contracted the pandemic virus worldwide and death toll at 233,000 people.

Technical Forecast   USD/JPY traded in small range around 107.00 last week with no direction. This week, we reckon the trend will be contained from 106.00 – 108.00 region until it breaks beyond in either direction. Traders are advised to observe the Dollar Index as general trend to gauge the USD/JPY market since there is not much fundamental influence in market now.

EUR/USD climbed higher last week as Dollar receded. Range escalated from 1.0800 – 1.1000 and might advance higher in coming weeks. Technically, we foresee the trend will be contained from 1.0900 – 1.1100 in coming week as Dollar stays in weakening behavior. Risk control is advised in case of a slide beneath the 1.0900 support.

GBP/USD has topped 1.2600 level last week. The price pattern reveals a resistance in market and prone to correct soon. This week, we aim for the trend to trade lower with support emerging at 1.2350 level. Overall range is expected to contain from 1.2350 – 1.2600 region until the movement breaks beyond this constriction.

Gold prices made a dip last week but supported at USD1660 /oz level. This week, we project the trend will be prone to strong demand but still capped beneath USD1740 /oz resistance. Overall range is expected to be contained from USD1660 – USD1740 /oz but likely to pierce above USD1750 /oz in mid-May. Traders are reminded to observe the Dollar direction that is an inverse catalyst to Gold prices.

WTI Crude prices recovered and approached near to USD20.00 /barrel before the long weekend. This week, we predict the trend will rise further but will be limited at USD23.00 /barrel. Downside is temporarily supported at USD16.00 /barrel. The threats of another downfall may come as the June Futures contract approaches expiration after mid-month.

Silver prices traded in small range last week but exhibited strong support at USD15.00 /oz level. This week, we target the demand will be strong at USD14.50 – USD15.00 /oz in case of drawdown while the topside might test USD16.00 /oz again. Be prepared for another surge in mid-month as yellow metal might lead another new high in Year 2020.

 

Crude Palm Oil (FCPO) Futures on Bursa Derivatives reversed up after market took a dip below RM2000 /MT benchmark. July20 Futures contract settled at RM2082 /MT on Friday. This week, the market is prone to recover while sitting on RM2030 /MT region. Upside potential may reach RM2200 /MT if the market demand recovers following the Crude prices rise.

 

DAR Wong has 30 years of trading and hedging experiences in global financial markets. The opinion is solely at his own.  He can be reached at dar@alaa.sg


About the Author
DAR Wong (Singapore)
An international speaker with 27 years of trading experience in the global financial markets, DAR is a Market Master and author of “Living Daylight in Stock Market: Monetizing Your Profits in 8 Days”.

DAR Wong is an active market trader, registered fund manager, educator and author.He began his career in 1989 as an institutional Futures trader with Bank of America. DAR Wong specializes in trading global derivatives and financial markets. He has 26 years of experience accumulated through tenure with Bankers Trust, Barclays Bank, Citigroup (Smith Barney Shearson Inc) and as an independent trader.

DAR is the author of “8 Ways to Invest in China’s Emerging Market” and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional traders and active investors.

He is a popular and sought after international speaker who has presented to financial professionals and investors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China, Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East (UAE).

DAR is registered with NASD (now known as FINRA) series 3 and 5 as approved by National Futures Association (NFA) of USA and holds a current portfolio as Fund Strategist and Advisor with Dektos Investment registered with Monetary Authority of Singapore.

DAR is profiled as “One of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading “. In January 2015, DAR was honored with Outstanding Award for International Financial Market Analysis granted by ASEAN Commerce (Thailand).

DAR is the author of "8 Waysto Invest in China's Emerging Market" and contributes frequently to regional media, including financial TV/Radio programmes, newspapers and magazines for professional tradersand active investors.1

He is a popular and sought after international speaker who has presented to financialprofessionals and inverstors throughout the region including Singapore, Malaysia, Indonesia, Thailand, Hong Kong, China,Cambodia, Myanmar, Philippines, Sri Lanka, India, South Korea, Laos, Vietnam, United Kingdom and Middle East(UAE).2


Year
2003 - Set up ASPRI to provide hedging advisory for corporate clients and training for financial professionals
2009 - Released first book “8 Ways to Invest in China’s Emerging Market”
2010 - Profiled as “one of the most successful traders – Market Masters” in Brent Penfold’s bestselling book “The Universal Principles of Successful Trading” along with Larry Williams, Andrea Unger, Michael Cook, and Daryl Guppy etc
2011 - Received “Spirit of Enterprise”awarded by Singapore Management University in Singapore
2012 - Honored with Individual Diamond Career (Thailand) awardedby Royal Privy Council of Kingdom of Thailand
2013 - Appointed Vice Chairman of ASEAN-China Commerce Association and led a delegationtothe annual China-Asean Expo in Guangxi Province, China
2014 - Fund Manager cum Director in Dektos Investment Corporation registered with Monetary Authority of Singapore
2015 - Released new book “Living Daylight in Stock Market - Monetizing Your Profits in 8 Days” in January
2015 - Honored with Outstanding Award in International Financial Market Analysis awarded by ASEAN Commerce (Thailand)
2016 - Honored with Medal of Integrity by Royal Councilin Palace of Palembng, Indonesia

References

1.TV programs on ChannelNewsAsia (Singapore);Radio on 95.8 Capital (Singapore); Newspapers such as The Borneo Post (Malaysia), 资汇报 (Malaysia); Regional financial magazines such as The Analyst (India), 东盟商界(ASEAN, China), 资本杂志 (Malaysia).

2.Spoke at events for CME Group, Euronext LIFFE, Tokyo Commodity Exchange, Singapore Exchange, Korea Exchange, Bursa Malaysia, Thailand Futures Exchange, Jakarta Futures Exchange, Indonesia Commodity and Derivatives Exchange, Tokyo Commodity Exchange, Interactive Brokers, Xinhu Futures, Hangzhou Money Fair, China (Shenzhen) International Finance Expo, China (Guangzhou) International Finance Expo, Euromoney, CIMB, Maybank, RHB, UOB Bank, Asia Trader & Investor Convention, Global Rubber Conference, International Rubber Conference, Malaysia Rubber Board, International Rubber Research and Development Board,Malaysia Ministry of Agriculture, Rubber Industry Smallholders Development Authority, Vietnam Rubber Association, Cambodian Rubber Association, Bureau of Agriculture Research Philippines, Myanmar Rubber Planters & Producers Association etc.