February 2024

ICE Futures Singapore Monthly Report

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MACRO COMMENTARY

The MINI U.S. DOLLAR INDEX ® FUTURES (SDX) closed higher for the second consecutive month of the year as demand for the U.S. Dollar persisted. The SDX closed the month with a gain of 0.98% at 104.10.

  • Nonfarm Payrolls surprised the markets after 353,000 new jobs were added in January, surpassing the expected 180,000 and the upwardly revised December figure of 333,000. Following this positive news the SDX closed with a gain of 0.88% at 103.78.
  • Core Inflation, excluding food and energy, surprised the markets after it held steady at 3.9% for the period 12-month ending January. While the Consumer Price Index (CPI) showed a higher than expected 3.1% increase in January for the 12-month period. The SDX closed the day with a gain of 0.77% at 104.85.
  • FOMC Minutes released on February 21st reaffirmed the Federal Reserve's decision to maintain the federal funds rate within the range of 5.25% - 5.50%. The meeting highlighted the significance of observing the economic data in their decision-making process regarding future rate adjustments. They also shared their caution of lowering rates too quickly although expressed a sense of optimism. The SDX closed the day at 103.91 with a gain of 0.06%.

The COINDESK BITCOIN FUTURES (BMC) rose to one of its highest levels, surging past $60,000, not seen since November 2021. Buyers returned in force after a brief pause in buying activity in the first three weeks of January. Having surged past the $50,000 level in the first two weeks of the month, the final days of February saw the price exceed the $60,000 level to close at $61,555, a gain of 45.4% compared to the prior month's close.

  • The United States House of Representatives Financial Services Committee is actively pursuing a resolution that advocates for regulated financial institutions to serve as custodians for digital assets. The objective is to challenge the guideline outlined in the United States Securities and Exchange Commission's (SEC) Staff Accounting Bulletin 121 (SAB 121). This bulletin requires digital asset custodians to disclose liabilities and "corresponding assets" on their balance sheets for cryptocurrencies held in custody on behalf of clients. Such a mandate significantly burdens financial institutions, compelling them to maintain a substantial amount of capital to mitigate associated risks.

The MICRO ASIA TECH 30 INDEX FUTURES (ATI) reversed the lower start to the year with a gain of 6.2% versus the January year-end close. The index was encouraged by strength in all four Asian equity markets.

  • Chinese component stocks ended February in positive territory except Baidu, which fell 1.8%. Strength was seen in Meituan, which was higher by 27.6%, NetEase rose by 16.3%, Kuaishou Technology was up by 13.8%, and Bilibili rose by 12.0%. Good performance was seen in Xiaomi Corp, up 7.3%, Sunny Optical Technology, rising 6.4%, and Alibaba, higher by 4.8%. JD.com rose 2.6% and Tencent 2.4%.
  • Taiwan stock components were higher in a short trading month, with one exception: United Microelectronics Corp was down marginally by 0.3%. The rest rose: MediaTek Inc. 18.0%, Taiwan Semiconductor 9.9%, Delta Electronics 5.2%, and Hon Hai Precision Industry 0.5%.
  • Japanese components were mixed for the month. Sony Group led the group lower by 11.9% and Z Corporation by 10.6%. Marginally lower were Murata Manufacturing by 0.4% and NTT Data by 0.2%. The remainder were positive: Tokyo Electron increased by 32.3%, Fujitsu by 12.2%, and Canon was higher by 7.3%. Keyence rose 5.2%,  FujiFilm Holdings gained 1.2%, and Nintendo rose 1.1%.
  • Korean component stocks higher included SK Hynix by 16.0%, Kakao by 1.5%, Samsung SDI by 1.2%, and Samsung Electronics by 1.0%. Only Naver Corp lost 2.7% during the month.
The MINI BRENT CRUDE FUTURES (BM) fell starting the month after creating a higher high against the late December high and set a higher low in what could have indicated the possibility of an upward trend with a clear move beyond the $84 level. Brent closed the month at $81.90, representing a 1.7% increase.

  • Anticipation centers around OPEC+ persisting with voluntary production cuts well into the second quarter, potentially sustaining a positive influence on crude prices. Initially, OPEC agreed to trim combined supply by 2.2 million barrels per day throughout the first quarter. On the demand side, market concerns linger over China's sluggish economic growth, while expectations suggest the United States Federal Reserve will keep interest rates steady in the near term.

MINI U.S. DOLLAR INDEX ® FUTURES
SYMBOL: SDX

CONDITIONS:
UPCOMING HIGH IMPACT EVENTS:
  • Fri 8 Mar Nonfarm Payrolls (Feb)
  • Tue 12 Mar Consumer Price Index (Feb)
  • Thr 14 Mar Retail Sales (Feb)
  • Wed 20 Mar Fed Interest Rate Decision & FOMC Press Conference
MARKET COMMENTARY
The demand for the U.S. Dollar declined on the first day of trading and the SDX closed with a loss of 0.21%, even after the release of strong data. Nonfarm Payrolls aided a bullish recovery on February 2nd, after data surpassed market expectations with the addition of 353,000 new jobs. The SDX closed with a gain of 0.88%, the strongest one-day performance of the month and closed the week at 103.78 with a gain of 0.53%.

The bullish momentum continued on February 5th, driven by increased demand for the U.S. Dollar after the release ISM Services PMI data and the Fed Chair Powell's speech. The SDX rallied to break through the upper boundary of the daily Bollinger Bands although struggled to break a previously tested resistance area at 104.01 - 104.40. Subsequently, the SDX traded sideways for the remainder of the week to close with a gain of 0.20%.

The demand for the U.S. Dollar strengthened the following week after largely positive data. The SDX rallied and broke the resistance area following the release of Core Inflation and CPI data, with a gain of 0.77% on the day. Thereafter the SDX closed lower for three consecutive days to end the week at 104.18 with a 0.18% gain.

The week ending February 23rd, the SDX closed the week at 103.86 with a loss of 0.31% after the release of the FOMC Minutes and a mixed set of economic data. The demand for the U.S. Dollar returned in the final week of February and the SDX rallied for the last three consecutive trading days. The Mini U.S. Dollar Index ® Futures closed the month at 104.10 with a gain of 0.98%.

Based on the technical indicators the SDX reverted to an uptrend on the weekly timeframe. However, on a daily timeframe the short-term moving averages continued to converge indicating a sideways market.

Daily technical indicators of SDX prices indicated strong buy overall based on the moving averages. The technical oscillators indicated both sell and buy conditions, which could prompt investors to consider waiting for a pullback before seeking trading opportunities. Using historical volatility, the price from the prior month’s close could range between 105.76 to 100.84 within the next 31 days. Investors or traders could consider the weekly support (102.31 to 101.82) or resistance (106.93 to 105.16) areas for planning their entries or exits, depending on their trading strategies.
Source: TradingView | Events Source: FXStreet | Conditions Table: using daily SMA (10, 20, 30,50, 100, 200), EMA (10, 20, 30,50, 100, 200), Ichimoku Cloud (9, 26, 52), VWMA (20), HullMA (9), RSI (14), Stochastic (14, 3, 3), CCI (20), ADX (14, 14), Awesome Oscillator, Momentum (10), MACD (12, 26, 9), Stochastic RSI (3, 3, 14, 14), Williams %R (14), Bulls and Bears Power and Ultimate Oscillator (7,14,28) | Statistical Ranges: projecting daily Historical Volatility (21, 42, 63) | Support & Resistance Levels: using AutoUFOs® (0.5) applied to daily, weekly and monthly timeframes (plotted as dotted lines that represent relevant support and resistance price zones colored as follows: red = resistance levels & green = support levels)

COINDESK BITCOIN FUTURES
SYMBOL: BMC

CONDITIONS:
UPCOMING HIGH IMPACT EVENTS:

  • April 2024 (Spring) bitcoin halving event
MARKET COMMENTARY
Bitcoin futures (BMC) rose to one of its highest levels, surging past $60,000, not seen since November 2021. Buyers returned in force after a brief pause in buying activity in the first three weeks of January. Having surged past the $50,000 level in the first two weeks of the month, the final days of February saw the price exceed the $60,000 level to close at $61,555, a gain of 45.4% compared to the prior month's close.

The United States House of Representatives Financial Services Committee is actively pursuing a resolution that advocates for regulated financial institutions to serve as custodians for digital assets. The objective is to challenge the guideline outlined in the United States Securities and Exchange Commission's (SEC) Staff Accounting Bulletin 121 (SAB 121). This bulletin requires digital asset custodians to disclose liabilities and "corresponding assets" on their balance sheets for cryptocurrencies held in custody on behalf of clients. Such a mandate significantly burdens financial institutions, compelling them to maintain a substantial amount of capital to mitigate associated risks.

Daily technical indicators of BMC prices indicated strong buying pressure based on the daily and weekly moving averages. The technical oscillators indicated daily short-term selling market conditions and neutral long-term conditions. Using historical volatility, the price from the prior month’s close could range between $50,665 to $72,455 ($21,800) in the next 31 days. Weekly support ($38,862 to $41,473) or resistance ($63,430 to $68,898) areas could be considered by investors or traders in planning their entries or exits based on their trading strategies.
Source: TradingView | Events Source: FXStreet | Conditions Table: using daily SMA (10, 20, 30,50, 100, 200), EMA (10, 20, 30,50, 100, 200), Ichimoku Cloud (9, 26, 52), VWMA (20), HullMA (9), RSI (14), Stochastic (14, 3, 3), CCI (20), ADX (14, 14), Awesome Oscillator, Momentum (10), MACD (12, 26, 9), Stochastic RSI (3, 3, 14, 14), Williams %R (14), Bulls and Bears Power and Ultimate Oscillator (7,14,28) | Statistical Ranges: projecting daily Historical Volatility (21, 42, 63) | Support & Resistance Levels: using AutoUFOs® (0.5) applied to daily, weekly and monthly timeframes (plotted as dotted lines that represent relevant support and resistance price zones colored as follows: red = resistance levels & green = support levels)

MICRO ASIA TECH 30 INDEX FUTURES
SYMBOL: ATI

CONDITIONS:
UPCOMING HIGH IMPACT EVENTS:

  • Sat 9 Mar China CPI (Feb)
  • Wed 20 Mar PBOC Interest Rate Decisionn
  • Sun 31 Mar China Manufacturing & Non-Manufacturing PMI (Mar)
MARKET COMMENTARY
ATI reversed the lower start to the year with a gain of 6.2% versus the January year-end close. The index was encouraged by strength in all four Asian equity markets.

Chinese component stocks ended February in positive territory except Baidu, which fell 1.8%. Strength was seen in Meituan, which was higher by 27.6%, NetEase rose by 16.3%, Kuaishou Technology was up by 13.8%, and Bilibili rose by 12.0%. Good performance was seen in Xiaomi Corp, up 7.3%, Sunny Optical Technology, rising 6.4%, and Alibaba, higher by 4.8%. JD.com rose 2.6% and Tencent 2.4%.

Taiwan stock components were higher in a short trading month, with one exception: United Microelectronics Corp was down marginally by 0.3%. The rest rose: MediaTek Inc. 18.0%, Taiwan Semiconductor 9.9%, Delta Electronics 5.2%, and Hon Hai Precision Industry 0.5%.

Japanese components were mixed for the month. Sony Group led the group lower by 11.9% and Z Corporation by 10.6%. Marginally lower were Murata Manufacturing by 0.4% and NTT Data by 0.2%. The remainder were positive: Tokyo Electron increased by 32.3%, Fujitsu by 12.2%, and Canon was higher by 7.3%. Keyence rose 5.2%,  FujiFilm Holdings gained 1.2%, and Nintendo rose 1.1%.

Korean component stocks higher included SK Hynix by 16.0%, Kakao by 1.5%, Samsung SDI by 1.2%, and Samsung Electronics by 1.0%. Only Naver Corp lost 2.7% during the month.

Daily and weekly moving average technical indicators of ATI prices indicated strong buying market conditions during the month. Technical oscillators showed mostly neutral market conditions last month. Using historical volatility, the price from the prior month’s close could range between $3,278 to $3,698 ($420) in the next 29 days. Weekly support ($3,163 to $3,391) or resistance ($3,611 to $3,746) areas could be considered by investors or traders in planning their entries or exits based on their trading strategies. Weekly chart prices were sideward, trending between $2,980 and $3,600.

Index Composition: 37% China, 23% Japan, 23% Taiwan and 17% South Korea
Source: TradingView | Events Source: FXStreet | Conditions Table: using daily SMA (10, 20, 30,50, 100, 200), EMA (10, 20, 30,50, 100, 200), Ichimoku Cloud (9, 26, 52), VWMA (20), HullMA (9), RSI (14), Stochastic (14, 3, 3), CCI (20), ADX (14, 14), Awesome Oscillator, Momentum (10), MACD (12, 26, 9), Stochastic RSI (3, 3, 14, 14), Williams %R (14), Bulls and Bears Power and Ultimate Oscillator (7,14,28) | Statistical Ranges: projecting daily Historical Volatility (21, 42, 63) | Support & Resistance Levels: using AutoUFOs® (0.5) applied to daily, weekly and monthly timeframes (plotted as dotted lines that represent relevant support and resistance price zones colored as follows: red = resistance levels & green = support levels)

MINI BRENT CRUDE FUTURES
SYMBOL: BM

CONDITIONS:
UPCOMING HIGH IMPACT EVENTS:

  • The 53rd Joint Ministerial Monitoring Committee (JMMC) is scheduled for 03 April 2024.
  • The 37th OPEC and non-OPEC Ministerial Meeting (ONOMM) will be held on Sat 1 June 2024 in Vienna.
MARKET COMMENTARY
Brent crude futures (BM) fell starting the month after creating a higher high against the late December high and set a higher low in what could indicate the possibility of an upward trend with a clear move beyond the $84 level. Brent closed the month at $81.90, representing a 1.7% increase.

Anticipation centers around OPEC+ persisting with voluntary production cuts well into the second quarter, potentially sustaining a positive influence on crude prices. Initially, OPEC agreed to trim combined supply by 2.2 million barrels per day throughout the first quarter. On the demand side, market concerns lingered over China's sluggish economic growth, while expectations suggested the United States Federal Reserve will keep interest rates steady in the near term.

Daily technical indicators of oil futures (BM) prices indicated a continued strong market bias toward buying. Technical oscillators in the prior month pointed towards a neutral state of the market. Using historical volatility, the price from the prior month’s close could range between $74.42 to $89.40 ($15.00) in the next 29 days. Weekly support ($77.88 to $79.10) or resistance ($87.05 to $90.13) areas could be considered by investors or traders in planning their entries or exits based on their trading strategies. Weekly chart prices were sideward, trending between $72 and $99.
Source: TradingView | Events Source: FXStreet | Conditions Table: using daily SMA (10, 20, 30,50, 100, 200), EMA (10, 20, 30,50, 100, 200), Ichimoku Cloud (9, 26, 52), VWMA (20), HullMA (9), RSI (14), Stochastic (14, 3, 3), CCI (20), ADX (14, 14), Awesome Oscillator, Momentum (10), MACD (12, 26, 9), Stochastic RSI (3, 3, 14, 14), Williams %R (14), Bulls and Bears Power and Ultimate Oscillator (7,14,28) | Statistical Ranges: projecting daily Historical Volatility (21, 42, 63) | Support & Resistance Levels: using AutoUFOs® (0.5) applied to daily, weekly and monthly timeframes (plotted as dotted lines that represent relevant support and resistance price zones colored as follows: red = resistance levels & green = support levels)
Micro MSCI USA Index Futures (SMU) and Micro MSCI Europe Index Futures (SME) contracts with a notional contract size of approximately USD 20,000 (as of the date of publication) are cash-settled.  Retail and professional investors are able to participate in these markets with minimal upfront deposits and experience a liquid intraday order book provided by appointed market makers during Asian trading hours.

MSCI USA Index constituents include large corporations in information technology (Apple), consumer discretionary (Amazon), communication services (Facebook), Financials (JPMorgan Chase), and health care (Johnson & Johnson); and MSCI Europe Index constituents include corporates from across Europe in consumer staples (Nestle), health care (Novartis), information technology (SAP) and industrials (Siemens).
Source: TradingView | Average True Range: using daily ATR (14) | Support & Resistance Levels: using AutoUFOs® (0.5) applied to daily and  weekly timeframes (plotted as dotted lines that represent relevant support and resistance price zones colored as follows:
red = resistance levels & green = support levels)
CONTRACT SPECIFICATIONS

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Limitations
Risk Considerations for Retail Investors or Users
Futures contracts based on bitcoin may pose specific risks. Such risks may arise from greater volatility in prices resulting from a range of factors. Those risks could in turn affect financial outcomes associated with maintaining required margins or any losses at final contract settlement. Accordingly, such products may not be suitable for a retail investor or user, and such person may wish to approach their broker to assess his/her suitability to transact in the product.

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