Outside of the Tech ramp, local investors will take an interest in China's housing data. Investors in Asia are entering Friday's trading session riding the bull of optimism, buoyed by the U.S.-led surge in mega tech stocks that has fueled a global stock market boom. The remarkable ascent witnessed across global markets on Thursday, driven by Nvidia's impressive 16.5% surge, is expected to set a positive tone for Asian markets on Friday. Investors will closely monitor market dynamics and potential profit-taking activities amidst bullish sentiment. And not to be overlooked, Chinese stocks have been on an impressive upward trajectory lately despite being far from their all-time highs. After hitting five-year lows a few weeks ago, they have rebounded soundly and are currently experiencing their longest winning streak in eons. According to the charts, If the CSI 300 index closes in positive territory on Friday, it will mark its best run in over six years. The improved sentiment towards China can be mainly attributed to the measures implemented by authorities in Beijing aimed at revitalizing economic activity and supporting markets, particularly the beleaguered housing market. Among these measures is a reduction in the benchmark 5-year lending rate, which is crucial in determining mortgage rates. While it's too early to assess the effectiveness of this week's rate cut, investors will take an interest in Chinese house price data scheduled for release on Friday. Over the past two years, house prices in China have consistently declined year-on-year. A reversal to growth in these prices would instill confidence among investors that the worst of the property sector downturn has passed and that the economy is on a more stable footing.

Gold price makes another run toward the $2,033 barrier amid an upbeat mood on Friday. US Dollar sellers ignore positive US Treasury bond yields and hawkish Fedspeak. Gold price remains poised for a firm break above $2,033, as a falling wedge breakout remains in play. Gold price is replicating the same moves seen in Thursday's Asian trading, as buyers attempt another run toward the key contention level of $2,033 early Friday. The US Dollar continues to display a subdued momentum, despite the hawkish Fedspeak and positive US Treasury bond yields, as Gold traders await the US Federal Reserve's (Fed) semi-annual Monetary Policy Report (MPR) due later on Friday. Gold price eyes more Fedspeak and Fed's Monetary Policy Report The Asian stock markets continue to cheer the overnight AI optimism wave seen on the Wall Street indices, in the wake of the encouraging earnings report from the US chipmaker Nvidia. The safe-haven US Dollar bears the brunt of the risk-on market profile, motivating Gold buyers to regain upside traction. However, the continued downfall in China's House Price Index combined with mixed global business PMI data and hawkish Fedspeak seem to take the wind out of the ongoing risk rally. S&P Global Manufacturing PMI improved to 51.5 from 50.7 in February, while S&P Global Services PMI edged lower to 51.3 from 52.5. Further, the US Treasury bond yields staged a modest comeback, as Fed policymakers kept pushing back against expectations of early and aggressive Fed interest rate cuts. Fed Governor Christopher Waller said late Thursday that there is no rush to begin cutting interest rates. Governor Lisa Cook noted that policy rates will change when disinflation looks sustainable. Meanwhile, Fed Vice Chair Phillip Jefferson said that "it will likely be appropriate to begin cutting policy rates later this year. If the risk-on mood wanes in the upcoming sessions, it could fuel a fresh uptrend in the US Dollar and Gold price could once again run into sellers at higher levels. Therefore, the Gold price action now remains in the hands of the broad market sentiment and the US Dollar dynamics, as traders brace for more Fedspeak and the key Fed's Monetary Policy Report. Also, the end-of-the-week flows could remain in play, spiking up volatility around the Gold price later in American trading. Gold price technical analysis: Daily chart The short-term technical outlook for Gold price remains more or less the same, as the bright metal remains poised to break higher through the crucial 50-day Simple Moving Average (SMA) hurdle at $2,033 on a weekly closing basis. The technical setup remains in favor of further upside, especially after the Gold price confirmed a falling wedge breakout above the descending trendline resistance of $2,018 earlier in the week. Gold buyers will need to find a strong foothold above the 50-day SMA at $2,035 to aim for the February 7 high of $2,044, followed by the $2,050 psychological barrier. The 14-day Relative Strength Index (RSI) sits just above the midline, backing the bullish potential in Gold price. On the contrary, if Gold buyers face rejection once again at the 50-day SMA, the 21-day SMA at $2,023 will be back on the sellers' radars. A failure to defend the latter could fuel a fresh downswing toward $2,004, the confluence of the wedge resistance-turned-support and the upward-pointing 100-day SMA. Ahead of that, Tuesday's low of $2,015 could come to the rescue of Gold optimists.

AUD/USD's upside momentum faltered ahead of 0.6600. Extra gains appear on the cards above the 200-day SMA. Australian flash PMIs came in mixed for the month of February. The upward momentum of the Australian dollar paused as it faced selling pressure upon approaching the key 0.6600 hurdle vs. its American counterpart on Thursday. In fact, the pair reversed six consecutive sessions of gains on the back of the tepid rebound in the Greenback, which was reinvigorated once again after further signs of tightness in the US labour market, this time via firm prints from weekly Initial Jobless Claims. The day's fluctuation in spot coincided with a lacklustre performance for the US Dollar (USD), as investors continued to evaluate the timing of potential monetary easing by the Federal Reserve (Fed). This sentiment gained traction following resilient US inflation data reported by the Consumer Price Index (CPI) and Producer Price Index (PPI) for January, as well as persistent hawkish narrative from some Fed officials. Meanwhile, on the calendar, advanced prints showed the Manufacturing PMI eased to 47.7 in February and the Services PMI improved to 52.8 in the same period. Despite the ongoing recovery of AUD/USD, investors are anticipated to monitor developments in China, commodity prices (especially copper and iron ore), and movements in the US Dollar closely. While additional stimulus measures in China could bolster a short-term rebound, news of a more sustainable recovery in the country is essential to provide stronger support for the Australian dollar and potentially trigger a more substantial upward movement in AUD/USD. A rebound in the Chinese economy is also expected to coincide with an uptick in commodity prices, further bolstering the AUD. Moreover, the current cautious stance of the RBA is likely to prevent significant downside pressure on the Aussie dollar. Back to the RBA, the central bank released the Minutes of its February meeting on Tuesday, characterized as a "hawkish hold." The minutes disclosed discussions on whether to raise the cash rate by 25 basis points or maintain it at the current level. Ultimately, the decision was to keep the rate unchanged at 4.35%, citing a reduced risk of inflation deviating from the Board's target in a timely manner. Additionally, members agreed on the importance of neither explicitly endorsing nor dismissing the prospect of future interest rate hikes. AUD/USD daily chart AUD/USD short-term technical outlook Once AUD/USD clears the weekly peak of 0.6595 (February 22), it could then retest the temporary 55-day SMA at 0.6628, which coincides with the late-January highs (January 30). A break above this range may take the pair to the December 2023 top of 0.6871 (December 28), followed by the July 2023 peak of 0.6894 (July 14) and the June 2023 high of 0.6899 (June 16), all before the important 0.7000 milestone. On the other side, bearish attempts may cause the AUD/USD to initially hit its 2024 bottom at 0.6452 (February 13). Breaking below this level might result in a revisit to the 2023 bottom of 0.6270 (October 26), followed by the round level of 0.6200 and the 2022 low of 0.6169. (October 13). It is worth noting that for the AUD/USD to experience more short-term gains, it must definitely leave behind the important 200-day SMA, which is now at 0.6561. The 4-hour chart suggests some consolidation in the short-term horizon. In comparison, the initial resistance level is 0.6595, closely followed by 0.6610. Surpassing this zone implies a possible progress to 0.6728. Meanwhile, a breakdown of 0.6442 may result in a drop to 0.6347, then 0.6338. The MACD remained into the positive zone, while the RSI dropped to the 50 zone.

Markets The S&P 500 surged to an all-time high on Thursday following Nvidia's much stronger-than-expected quarterly results, which buoyed the broader tech sector. Nvidia's stock soared more than 14.5% to reach an all-time high after the company reported a remarkable 265% year-over-year increase in total revenue, driven primarily by its booming artificial intelligence business. Nvidia, the world's most important stock and, increasingly, the market's most crucial wealth-generating company, also forecasted another substantial revenue gain for the current quarter, surpassing already high expectations for substantial growth. Other tech giants also saw gains, with Meta (formerly Facebook) and Amazon climbing more than 4% and 2.5%, respectively. Microsoft and Netflix also experienced increases of more than 1%. As one of the Mag 7 goes, the rest will assuredly follow.  Still, over the past year, the unbridled enthusiasm for artificial intelligence has been a critical driver behind Nvidia's jaw-dropping rally and other major tech company's performances. Nvidia's outstanding quarterly performance will likely instill further confidence in the tech sector, benefiting the broader market sentiment. The rapid ascent overnight has also been a function of call options, some of which we alluded to in yesterday's note, that have led to dealer short gamma positioning in certain upside strike levels. Market makers were squeezed to turn buyers of futures and cover quickly, adding to the velocity of the index moves. Over the past months, investors have been tucking into call options, driven by concerns about the potential for a significant upside move or a right-tail crash-up in the market.  Indeed, the accumulation of call options and the subsequent rush to cover gamma have significantly fueled the upward trajectory of the S&P index overnight. As traders and market participants react to the dynamics of options positioning, it can create a feedback loop amplifying market movements, especially during heightened volatility and uncertainty periods. I'm not suggesting we would not be on the cusp of 5100 if it were not for call option positioning; I'm just saying we probably got there a lot quicker than many had expected. Japan: Nvidia Ripple effect Nvidia's strong results had a ripple effect across global markets, notably in Japan, where the Nikkei stock average surpassed its 1989 all-time high. The positive sentiment extended to shares of chip makers in South Korea, Taiwan, and China, which experienced significant jumps in their stock prices. Similarly, U.S. chip maker stocks also saw gains in response to Nvidia's robust performance and optimistic outlook. Indeed, several dynamics are at play in Japan's markets. Still, the condensed version highlights that the Japanese economy has successfully overcome the deflation demon with reasonable valuations and generally sound corporate fundamentals. Additionally, the historically weak yen adds to the favourable conditions, suggesting significant potential for growth and investment opportunities in Japan's markets. The yen and the Japanese stock market have a notable long-term inverse relationship. This relationship is predicated on Japan's economy relying heavily on exports, and a weaker yen benefits equities. However, the dynamics influencing Japanese stocks are more nuanced than just currency fluctuations. Here is the kicker: Despite the recent rally, many Japanese stocks remain depressed, with reports that 37% of Nikkei members are trading below their book value, implying that investors could potentially earn more money by liquidating all the company's assets than by continuing its operations. While this indicates a lack of confidence in management, it also suggests significant upside potential if companies are managed effectively. In comparison, only 3% of stocks in the S&P 500 trade below book value, while just one-fifth of stocks in the Stoxx Europe 600 Index fall into this category.  The Nikkei breaking fresh higher ground is the culmination of a 34-year roller-coaster journey for Japanese shares, which transitioned from being the most highly valued in the world to among the most undervalued. Now, investors are setting their sights on the sky is the limit.   Equity strategists are likely intrigued by the factors propelling this current equity high. However, realists may caution against extrapolating from past economic trends when attempting to forecast future economic success. Macro backdrop The preliminary read on S&P Global's PMIs for the U.S. manufacturing sector indicated the brisk expansion at the fastest rate in 17 months in early February. This release came amidst a highly active backdrop on Thursday, with Nvidia's outstanding quarterly results competing for attention alongside the Nikkei's record-setting achievement. The flash print on the manufacturing PMI stood at 51.5, up from 50.7 in January, marking the highest reading since September 2022. This figure surpassed the highest estimate from among 18 forecasters. Furthermore, the new orders subindex for manufacturing reached 53.5, its highest level since May 2022, while the employment gauge rose to a five-month high. Yields once again perked up, and as they are so often wont to do on robust U.S. data, oil markets and the U.S. dollar turned...

XAU/USD Current price: $2,020.86 Stock markets welcomed robust earnings reports, posted gains in all sessions. United States macroeconomic data indicated resilience, US Dollar trimmed early losses. XAU/USD seem to have pared the near-term bleeding, but the risk remains skewed to the downside. Spot Gold eased from a fresh multi-week high of $2,034.86. The US Dollar edged sharply lower during Asian trading hours and remained on the back foot through most of the European session but turned higher ahead of Wall Street's opening. The early slide can be attributed to a rally in tech stocks, pushing Asian and European indexes sharply higher.   United States (US) indexes rallied ahead of the opening, but that did not prevent the USD from recovering ground following the release of US data. The country reported that Initial Jobless Claims increased by less than anticipated in the week ended February 16, up 201K vs the 218K expected. Additionally, S&P Global published the flash estimate of the February Producer Manager Indexes (PMIs), showing manufacturing activity expanded at the fastest pace since September 2022, with the index jumping to 51.5 from 50.7 in January. The services index printed at 51.3, shrinking from 52.5 previously and missing expectations of 52, while the Composite PMI was confirmed at 51.4, slightly below the 52 posted in January. Meanwhile, government bond yields pressure multi-week highs, with the 10-year Treasury note currently hovering around 4.31% after an early peak of 4.35%. Yields surged on Wednesday following the release of the Federal Open Market Committee (FOMC) meeting Minutes. The document confirmed officials are in no rush to cut rates, as they would prefer to see more evidence of inflation progress before trimming rates. Policymakers highlighted the risks of "moving too quickly," although acknowledging the policy rate is likely at its peak for this tightening cycle. XAU/USD short-term technical outlook XAU/USD is little changed for a second consecutive day, trading with modest losses at around $2,020. Technical readings in the daily chart show buyers are moving to the sidelines, as the pair can not extend gains beyond a directionless 20 Simple Moving Average (SMA). Meanwhile, the 100 SMA preserves its bullish strength at around $1,999.20. Finally, technical indicators remain below their midlines, with neutral-to-bearish slopes, suggesting Gold may extend its slump. The 4-hour chart shows the pair has spent the last two days under selling pressure, although the bleeding seems to have stalled. The pair is recovering modestly from an intraday low of $2,019.62. Technical indicators have lost their downward momentum, with the Relative Strength Index (RSI) indicator stabilizing at around 36. At the same time, XAU/USD is hovering around a mildly bullish 100 SMA, while the 20 SMA turned marginally lower, well above the current level.  Support levels: 2,019.60 2,011.40 1,995.35   Resistance levels: 2,032.50 2,045.20 2,064.90

EUR/USD Current price: 1.0850 The EU Hamburg Commercial Bank flash PMIs indicated contraction decelerated but remains. Stock markets surged amid solid earning reports boosting the tech sector. EUR/USD retains its near-term positive momentum after peaking at 1.0888. The EUR/USD pair jumped to 1.0888 on Thursday as the US Dollar turned south following a solid performance in Asian equities, indicating an improved market mood. Stock markets rallied after NVIDIA unveiled its earning report, with higher-than-anticipated sales estimates, boosting the tech sector and risk appetite. EUR/USD rally cooled down following the release of tepid European data. The Hamburg Commercial Bank (HCOB) released the February flash Producer Manager Indexes (PMIs), indicating a deceleration in the rate of contraction across the bloc's business activity. The Eurozone witnessed the slowest pace of decline in eight months, with the provisional PMI survey data revealing stabilization in the services sector, which helped somewhat to counterbalance the continued sharp downturn in manufacturing output. The HCOB Flash Eurozone Composite PMI rose modestly from 47.9 in January to 48.9. Despite signaling a ninth consecutive month of contracting output, the latest reading points to a moderation in the extent of the economic downturn, excluding the initial months of the pandemic, since 2013. The manufacturing index contracted to 46.1 from the previous 46.6, while the Services PMI surged to 50 after printing at 48.4 in January. However, the German HCOB Flash PMI data indicated a persistent contraction in business activity. February's report suggests that the downturn is intensifying as the Composite PMI held within contraction levels for the eighth consecutive month, falling to 46.1 from 47.0 in January. The manufacturing sector, in particular, experienced a sharp and accelerated reduction in output, with the index plummeting from  46.1 to a stark 42.3. The contraction in the service sector was milder, as the Services PMI improved to 48.2 from 47.7, still below the critical 50 mark that indicates expansion. EU figures pushed EUR/USD towards the 1.0840 price zone, where buyers took their chances ahead of Wall Street's opening, as optimism prevails. The upcoming American session will see the United States (US) releasing the usual weekly unemployment figures and Existing Home Sales, while S&P Global will publish the February Flash PMIs. EUR/USD short-term technical outlook The EUR/USD pair trades a handful of pips below the 38.2% Fibonacci retracement of the 1.1139-1.0694 daily slump at 1.0865 and seems poised to extend gains beyond the intraday high. In the daily chart, technical indicators suggest a robust upward momentum after crossing their midlines into positive territory while maintaining firmly bullish slopes. At the same time, EUR/USD is currently developing above all its moving averages, with the 100 Simple Moving Average (SMA) crossing above a flat 20 SMA. The latter converges with the 23.6% retracement of the aforementioned slide at 1.0799. As of the 4-hour chart, the EURUSD pair also exhibits a strong bullish momentum, although technical indicators have pared their rallies around overbought readings. Meanwhile, the 100 SMA is flat at 1.0780, while the 200 SMA also lacks directional strength at around 1.0840. Finally, the 20 SMA extends its advance above the 100 SMA, reinforcing the near-term bullish sentiment. The pair has room to extend gains towards the next Fibonacci level, the 50% retracement at 1.0915, should the intraday high be surpassed. Support levels: 1.0800 1.0765 1.0720 Resistance levels: 1.0880 1.0915 1.0950