US stock indices rally on Nvidia. China chip news ahead of CPI and earnings. China data comes in mixed. The US dollar retreats while Asian markets, led by the Singapore STI, show bullish momentum.
US stock indices rallied towards resistance ahead of US banks' earnings, US dollar retreated before US CPI
The benchmark US stock indices drifted higher on Monday, 14 January. The S&P 500 added 0.1%, and the Nasdaq 100 advanced 0.3% ahead of today’s key US CPI data release. This was coupled with the Q2 earnings announcements of major US financial firms (JP Morgan, Citigroup, Wells Fargo, and BlackRock) before the start of the US session.
In today’s Asia opening session (9.00 am SGT), the S&P 500 and Nasdaq 100 E-mini futures squeezed higher abruptly by 0.5%, which caused the US SPX 500 CFD Index and US Nasdaq 100 CFD Index to probe their respective key short-term resistances at 6,290 and 22,920, respectively.
Also read: Chart of the week: S&P 500 analysis as Q2 earnings season begins.
The sharp intraday rally in the US stock indices futures has been triggered by positive news from the Artificial Intelligence (AI) juggernaut Nvidia. In a blog post, the company highlighted that it received assurances from the US government to resume sales of its lower-end H20 artificial intelligence accelerator chips to China, reversing billions of dollars of losses from unsold H20 inventory.
China’s slew of key economic data beat expectations, except for retail sales. New home prices in 70 Chinese cities declined at a slower pace of -3.2% y/y in June from -3.5% y/y in May, the latest reading was the slowest pace since April 2024, reducing the risk of a deflationary spiral.
Q2 GDP growth advanced at a slightly slower pace by 5.2% y/y from Q1 print of 5.4% y/y but above consensus estimates of 5.1%.
Industrial production soared to 6.8% y/y in June, its fastest growth since March, from 5.8% y/y in May, and above consensus estimates of 5.6% y/y. Meanwhile, retail sales in June rose at a slower pace of 4.8% y/y, its weakest growth since February, from 6.4% y/y in May, below the forecast of 5.6% y/y.
The upbeat data from China has reinforced the ongoing minor bullish uptrend phase of the Hang Seng Index in place since 2 June, as it rose for the fourth consecutive day with an intraday gain of 1% to retest its intermediate range resistance of 24,490 in place since 25 June.
Japan’s Nikkei 225 has also seen an intraday minor bullish reversal of 0.6% after a re-test of its 20-day moving average today, which is acting as an intermediate support at around 39,390. Bullish momentum continues to prevail in Singapore’s Straits Times Index as it broke above the 4,100 psychological level, advancing by 0.4% intraday for another seventh consecutive session of a fresh all-time high.
The last three sessions of US dollar strength in general are likely to have priced in the hotter-than-expected US core CPI print of 3% y/y for June (above May’s reading of 2.8% y/y). In today’s Asian session, the US dollar has started to retreat ahead of today’s US CPI data release, led by the CHF (0.2%), NZD (0.2%), and EUR (0.1%) that are strengthened against the greenback.
The current retreat seen in the US dollar has also supported the ongoing intraday bullish tone seen in Gold (XAU/USD) as the yellow metal managed to stage a rally of 0.4% above its 20-day and 50-day moving averages towards the US$3,360 intermediate range resistance in place since 24 June.
Our YouTube video above contains the latest intraday technical analysis on the latest intraday technical analysis on US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
