InvestMacro

By JustMarkets

The latest economic data showed that durable goods orders fell by 4.5%, more than the expected 3.7%. This data has somewhat lessened the nervousness about the impending interest rate hike. As the stock market closed on Monday, the Dow Jones Index (US30) increased by 0.22%, while the S&P 500 Index (US500) added 0.31%. The NASDAQ Technology Index (US100) gained 0.63%.

The January euphoria based on expectations that major economies will avoid recession this year has given way to something close to realism about the prospects for interest rates to rise more and stay high longer than many had previously expected. Economists at Barclays (BARC) and NatWest believe the Fed may increase the pace of interest rate hikes in March by 0.5%. At the same time, Morgan Stanley (MS) said it expects a slower pace of hikes of 25 basis points at each of the next three meetings. Fed funds futures show that traders expect rates to peak at 5.4% by September.

Tesla (TSLA) led growth in the consumer products segment yesterday. Analysts expect the company to unveil a master plan and a new long-term growth strategy, particularly its 3rd generation automotive platform.

Pharmaceutical company Pfizer (PFE) is in preliminary talks to acquire cancer drugmaker Seagen (SGEN).

Stock markets in Europe were mostly up on Monday. German DAX (DE30) gained 1.13%, French CAC 40 (FR40) added 1.51%, Spanish IBEX 35 (ES35) gained 1.23%, and British FTSE 100 (UK100) closed up by 0.72% yesterday.

Britain and the EU are on the verge of a Brexit deal on Northern Ireland. Key politicians in Northern Ireland have set the bar high for a deal. Parts of the new UK government remain permeated by the Brexit controversy that has paralyzed British politics after the country’s vote to leave the EU in 2016. As part of its withdrawal agreement, Britain signed an agreement with Brussels known as the Northern Ireland Protocol to avoid imposing politically contentious checks along the 500-kilometer (310-mile) land border with EU member Ireland. But the protocol effectively created a border for some goods moving from Britain because it left Northern Ireland in the EU’s single market for goods.

Russia has suspended oil shipments to Poland through the “Druzhba” pipeline, Polish oil refiner PKN Orlen said Saturday. Earlier this month, Russia announced plans to cut oil exports from its western ports by 25% in March compared with last month, exceeding a previously discussed production cut of 5%. Nevertheless, most analysts believe the European Union’s ban on Russian oil imports by sea and international price caps will have only a marginal effect on overall global supplies.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.11% for the day, China’s FTSE China A50 (CHA50) was down by 0.12%, Hong Kong’s Hang Seng (HK50) fell by 0.33%, India’s NIFTY 50 (IND50) lost 0.41%, and Australia’s S&P/ASX 200 (AU200) was down by 1.12%.

According to a Bloomberg survey, about 70% of economists forecast a tightening by the Central Bank of Japan by July, with 26% expecting such a move at Ueda’s first meeting in April and June, respectively. Some have warned of the risk that the bank could change its yield curve control program in March before Kuroda leaves office to give Ueda more time. Incoming Bank of Japan (BOJ) Governor Kazuo Ueda said Monday that he had ideas about how the central bank could abandon its massive stimulus but that the shift to tighter policy would only happen when the country’s trend inflation picks up significantly.

S&P 500 (F) (US500) 3,982.24 +12.20 (+0.31%)

Dow Jones (US30)32,889.09 +72.17 (+0.22%)

DAX (DE40) 15,381.43 +171.69 (+1.13%)

FTSE 100 (UK100) 7,935.11 +56.45 (+0.72%)

USD Index 104.65 -0.56 (+0.63%)

• – Japan Retail Sales (m/m) at 01:50 (GMT+2);
• – Japan Industrial Production (m/m) at 01:50 (GMT+2);
• – Australia Retail Sales (m/m) at 02:30 (GMT+2);
• – Japan BOJ Gov-Designate Ueda Speaks at 06:10 (GMT+2);
• – Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+2);
• – Switzerland GDP (q/q) at 10:00 (GMT+2);
• – Indian GDP (q/q) at 14:00 (GMT+2);
• – Canada GDP (q/q) at 15:30 (GMT+2);
• – US Richmond Manufacturing Index (m/m) at 17:00 (GMT+2);
• – US CB Consumer Confidence (m/m) at 17:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By George Prior

The deal on the Northern Ireland protocol today will help “significantly revive” business investment into the UK from global investors, says the CEO and founder of one of the world’s largest independent financial advisory, asset management and fintech organizations.

The bullish observation from deVere Group chief executive Nigel Green comes as Prime Minister Rishi Sunak unveiled a Brexit deal with the EU on Monday that aims to overhaul Northern Ireland’s post-Brexit trading arrangements, brings a bitter dispute between the two sides to an end, restores devolved government in Belfast, and eases concerns from the US about the Northern Ireland situation.

The deVere CEO says: “Since the 2016 Brexit referendum, and the intense political wranglings it has caused, business investment into the UK from global investors has faltered.

“The possibility of an all-out trade war between the UK and the EU, plus the multifaceted political fallout, has triggered major uncertainty – which investors avoided due to the risks involved. Companies are never going to heavily invest where there are high levels of uncertainty.

“This deal will help unleash business investment that has been held back by global investors.”

Brexit has been the direct cause of £29bn in business investment being lost and fuelled the slowdown in productivity, according to a Bank of England interest rate setter.

Jonathan Haskel noted the lack of business investment growth since the Brexit referendum was equivalent to 1.3% of UK gross domestic product (GDP).

“The deal announced on Monday settles the dispute that has been raging since 2021 when the UK left the EU single market and customs union through changes to the workings of the Northern Ireland protocol, which was part of the Brexit agreement signed by Boris Johnson back in 2019,” says Nigel Green.

“We expect this new development will help significantly revive business investment into the UK from global investors.”

The deVere Group CEO also notes that the British pound is likely to be given a much-needed bounce now a political agreement between the UK and the EU on the Northern Ireland protocol has been reached.

“We expect the pound will enjoy a bounce amid hopes for improved trading relations between the UK and the EU, which bolsters investor sentiment on Britain’s economic outlook.”

Since Brexit, the pound has been out of favour with FX traders, with the UK currency falling nearly 18% against a basket of currencies since the referendum.

It has also been dragged down in recent months by fears over slowing economic growth and multi-decades high inflation.

“We could now be heading past peak pound pessimism.”

The deVere Group CEO concludes: “Investors need certainty to invest. This deal on the Northern Ireland protocol helps bring that back.”

About:

deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients.  It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.

By JustMarkets

The January PCE data released Friday, one of the Fed’s favorite inflation indicators, showed an unexpected increase in price pressures. The PCE index rose by 0.6% in the last month, and the annual rate was 5.4%. This is negative data, indicating that inflationary pressures remain high. Thus, Fed policymakers have no choice but to maintain an aggressive stance longer. At the close of the stock market on Friday, the Dow Jones Index (US30) decreased by 1.02 (-2.55% for the week), and the S&P 500 (US500) fell by 1.05% (-2.63% for the week). The NASDAQ Technology Index (US100) was down by 1.69% on Friday (-3.25% for the week).

Cleveland Fed President Loretta Mester said that the latest inflation report is consistent with the fact that policymakers need to “do a little more” to make sure inflation is down. Her Boston colleague, Susan Collins, said the Central Bank needs to keep raising rates to get them to a restrictive level, and the Fed may have to hold them at that level for an “extended” period.

Strong labor market data combined with persistently elevated price pressures have increased expectations for the Fed’s interest rate cap, raising it to 5.39%, which suggests three additional 25 basis point hikes during the spring and summer. The higher peak in borrowing costs is supporting Treasury yields, which in turn is driving the dollar index higher and stock indices lower. And the current dynamics are unlikely to change anytime soon.

The Bank of Canada predicts that inflation in the country will fall to about 3% by mid-2023 and fall back to the 2% target in 2024. Most private sector economists also forecast similar numbers. But the forecasts come with a major caveat: Canada must be protected from unexpected global events that could cause a new rise in inflation.

Equity markets in Europe were mostly down on Friday. German DAX (DE30) shed by 1.72% (-2.03% for the week), French CAC 40 (FR40) lost 1.78% (-2.36% for the week), Spanish IBEX 35 (ES35) was down by 0.11% (-1.40% for the week), British FTSE 100 (UK100) fell by 0.37% (-1.57% for the week).

On March 16, the ECB will almost certainly raise the interest rate by 0.5%. And it is already in the price. But what is important is how the ECB will behave at the next meetings. Analysts believe that another likely decline in the overall level of inflation in the euro area caused by energy is unlikely to reassure ECB policymakers, as core price pressures are still elevated. Deutsche Bank analysts are now forecasting the ECB rate to peak at 3.75% in June. Bank of France Governor François Villeroy de Galhau tried to refute such expectations. Still, his German colleague Joachim Nagel said Friday he did not rule out further “significant” rate hikes after March.

The United Kingdom marked the anniversary of Russia’s invasion of Ukraine with new sanctions against Russia. A ban on Russian iron and steel products followed the ban on oil exports. The British government also said it would target aircraft parts, radio equipment, and electronic components. This could severely damage Russian airlines, which mostly have European and American planes. The US would also impose a 200 percent duty on all imports of Russian-made aluminum, which could affect global supply chains. Treasury Secretary Janet Yellen warned China and other countries against providing material support to Russia, saying any such action would amount to sanctions evasion and would “prove very serious consequences.”

Gold prices were under pressure last week due to the prospect of higher interest rates and a stronger US dollar. Gold and silver are inversely correlated to government bond yields. In periods of rising interest rates, government bond yields are rising, putting downward pressure on precious metals. For the resumption of a trend for gold and silver, it is necessary that government bond yields at least stop rising and, at the most, start to fall. And for that, the US Federal Reserve should stop tightening its policy. Considering the time lag, the bullish trend in gold will return when the market is dominated by the sentiment that the US Federal Reserve is about to “press pause.” And that won’t happen until late spring or early summer.

Asian markets mostly declined last week. Japan’s Nikkei 225 (JP225) decreased by 0.11% for the week, China’s FTSE China A50 (CHA50) lost 1.16%, Hong Kong’s Hang Seng (HK50) fell by 3.25%, India’s NIFTY 50 (IND50) was down by 2.61%, and Australia’s S&P/ASX 200 (AU200) was negative by 0.54% for the week.

Australian Prime Minister Anthony Albanese called on the country’s major banks to raise deposit rates for depositors amid fears that higher interest rates are being passed on entirely to borrowers. The country’s competition watchdog began investigating the issue this month, saying that the deposit interest rate hikes were “smaller and less consistent” than the mortgage interest rate hikes. This means that ordinary people in Australia are caught on two fronts. This has also led to criticism of RBA Governor Philip Lowe, whose term expires in September, and there is a high chance Lowe will not be re-elected.

In the commodities market, futures on natural gas (+13.71%), gasoline (+7.24%), orange juice (+6.36%), lumber (+4.82%), and cotton (+4.36%) showed the biggest gains last week. Futures on wheat (-7.31%), palladium (-6.4%), silver (-4.49%), corn (-4.17%), and copper (-3.7%) showed the biggest drop.

S&P 500 (F) (US500) 3,970.04 −42.28 (−1.05%)

Dow Jones (US30)32,816.92 −336.99 (−1.02%)

DAX (DE40) 15,209.74 −265.95 (−1.72%)

FTSE 100 (UK100) 7,878.66 −29.06 (−0.37%)

USD Index 105.26 +0.66 (+0.63%)

• – US Durable Goods Orders (m/m) at 15:30 (GMT+2);
• – US Pending Home Sales (m/m) at 17:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By ForexTime

As we close out the month and head into the first days of March, here are the scheduled economic data releases and events that could move markets over the coming week:

Monday, February 27

• EUR: Eurozone February economic confidence; ECB Chief Economist Philip Lane speech
• GBP: Bank of England Deputy Governor Ben Broadbent speech

Tuesday, February 28

• JPY: Japan January industrial production, retail sales
• AUD: Australia January retail sales
• CAD: Canada December GDP
• USD: US February consumer confidence; Chicago Fed President Austan Goolsbee speech

Wednesday, March 1

• AUD: Australia 4Q GDP
• CNH: China February PMIs
• EUR: Eurozone February manufacturing PMI (final)
• GBP: UK February manufacturing PMI (final); BOE Governor Andrew Bailey speech
• USD: US February ISM manufacturing

Thursday, March 2

• EUR: Eurozone February CPI, ECB minutes, January unemployment
• GBP: BOE Chief Economist Huw Pill speech
• USD: US weekly jobless claims

Friday, March 3

• JPY: Japan January unemployment; February Tokyo CPI
• CNH: China February services PMI
• EUR: Eurozone January PPI, February services PMI (final)

With month-to-date declines of 2.4%, EURUSD is set to bring the curtains down on a winning run of four consecutive monthly gains (October – January).

Following February’s flop, here are three reasons why Euro bulls will be eager to start off March on the front foot:

1. Still-elevated Eurozone inflation could strengthen EUR

Recall that central banks around the world have been aggressively raising their respective interest rates to try and cool down inflation.

Since July 2022, the European Central Bank (ECB) has lifted its benchmark rates by a cumulative 300 basis points.

Yet the Eurozone’s January inflation number (as measured by the CPI – consumer price index) came in at 8.6%, which is more than four times the ECB’s 2% target.

The Eurozone’s core CPI (inflation figure that excludes more volatile items such as energy, food, alcohol, and tobacco) still printed at a record high of 5.3% in January!

In other words, the ECB is likely to keep hiking its benchmark rates higher and longer, in order to drag inflation meaningfully lower towards 2%.

And the prospects of higher interest rates tends to translate into currency strength.

Hence, if we are presented with fresh evidence on March 2nd of stubborn Eurozone inflation (say, a number that isn’t noticeably lower than January’s 8.6%), that could help the euro unwind its near-1% of year-to-date declines against the resurgent US dollar.

READ MORE: (September 2022) Why FX markets react to central banks?

2. Bloomberg model: EURUSD slightly likelier to touch 1.070 than 1.050

From current levels of 1.060 flat at the time of writing, Bloomberg’s FX forecast model points to a 40% chance that we’ll see the world’s most popular FX pair touch 1.070.

Compare that with the slightly lower 36% chance of EURUSD touching 1.05 over the next one-week period.

While both price levels are accorded less-than-even odds, it remains to be seen whether the CPI print or other fundamental factors could trigger such a massive move.

3. EURUSD may see technical rebound if “oversold” levels reached

This FX pair’s 14-day relative strength index has been careening closer towards the 30 mark, which is the threshold that denotes oversold conditions.

Note how in previous episodes, once the RSI drops below the 30 line, EURUSD then duly bounces back up.

Of course, that means that EURUSD has to fall further in order for its RSI to actually hit the 30 threshold at least, before it can even get a chance of seeing a technical rebound.

And that EURUSD decline may even happen later today (Friday, February 24t ), if the US PCE deflator (the Federal Reserve’s preferred metric for measuring inflation) comes in higher than the market forecasts for a 5% year-on-year advance.

Such an event (higher-than-expected US PCE deflator) later today should translate into more US Dollar strength (i.e. lower EURUSD), and could just pave the way for EURUSD’s technical rebound next week.

Key levels for EURUSD in the week ahead:

SUPPORT

• 1.050 region: psychologically-important area
• 1.04832: January 2023 cycle low
• 1.040 region: psychologically-important line

RESISTANCE

• 50-day simple moving average (SMA)
• 1.07365: mid-December cycle high
• 1.08045: mid-February high

At the time of writing, Bloomberg’s FX model forecasts a 74% chance that EURUSD will trade within the 1.0476 – 1.0729 range, using current levels as a base, over the next one week.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

By JustMarkets

The minutes of the Federal Reserve’s February meeting contained no new hawkish statements but added to expectations that further interest rate hikes are necessary to control inflation. 10-year Treasury yields closed near their daily highs after the minutes were released, sending the dollar index higher and stock indices lower. The Dow Jones Index (US30) decreased by 0.26%, and the S&P 500 Index (US500) fell by 0.16% on Wednesday at the close of the stock market. The NASDAQ Technology Index (US100) gained 0.13%. A stronger-than-expected earnings outlook from Nvidia helped tech stocks, especially chipmakers.

Federal Reserve Bank of St. Louis President James Bullard said the US economy has been more resilient than expected and reiterated his call to keep raising interest rates. The main goal is to raise the rate above 5%. For monetary policy, this means that the final rate could be set at around 5.375% this summer and remain at that level for some time until there is sufficient evidence that inflationary forces are weakening on a sustained basis.

According to analysts, the outlook for technology stocks is limited, especially as US interest rates are set to rise even further. Chipmakers will face a potential slowdown in demand this year as global companies cut back on spending because of recession fears. Today, investors will focus their attention on a revision of US fourth-quarter GDP data. A strong US economy will give the Fed more room to raise interest rates further.

According to JPMorgan strategists, it is too early to talk about a recession after the Federal Reserve’s aggressive campaign, especially since the impact of monetary policy on the economy may have a lag of one to two years.

Equity markets in Europe were mostly down yesterday. German DAX (DE30) gained 0.02%, French CAC 40 (FR40) was 0.13% lower, Spanish IBEX 35 (ES35) decreased by 0.91%, and British FTSE 100 (UK100) was 0.59% lower.

Eurozone’s inflation data will be released today. Consumer prices are expected to remain flat, but surprises are possible. Lower inflation may temper the ECB’s aggressive tone at the May meeting (in March, a 0.5% increase is already priced in). A rise in inflation, on the other hand, will only strengthen the ECB’s hawkish bias in the coming months, which may give support to the euro.

Moscow plans to cut oil exports from its Western ports by 25% in March compared to the previous month in order to boost oil prices. The move is expected to result in a deeper supply cut than 500,000 barrels. According to strategists, rising US inventories combined with the planned sale of 26 million barrels from the US Strategic Petroleum Reserve point to a potential supply glut, which is expected to limit any potential rise in crude oil prices.

Geopolitical tensions around the world are rising again. Russia has withdrawn from an important nuclear agreement that limited nuclear capabilities. North Korea plans to test intercontinental ballistic missiles in response to planned military exercises by the United States and South Korea. China and the United States are blaming each other over the “ballooning” saga.

Asian markets mostly fell yesterday. Japan’s Nikkei 225 (JP225) decreased by 1.34%, China’s FTSE China A50 (CHA50) lost 1.11% yesterday, Hong Kong’s Hang Seng (HK50) ended the day down by 0.51%, India’s NIFTY 50 (IND50) fell by 1.53%, and Australia’s S&P/ASX 200 (AU200) ended the day slightly negative by 0.30%.

Singapore’s annualized inflation rate rose from 6.5% to 6.6%. Core consumer prices, which exclude energy and food, rose from 5.1% to 5.5%. Price pressures remain elevated, largely due to Singapore’s heavy reliance on food and fuel imports. The Monetary Authority of Singapore (MAS) predicts that inflation will remain high in the coming months amid high import costs, labor market shortages, and strong local demand.

S&P 500 (F) (US500) 3,991.05 −6.29 (−0.16%)

Dow Jones (US30)33,045.09 −84.50 (−0.26%)

DAX (DE40) 15,399.89 +2.27 (+0.015%)

FTSE 100 (UK100) 7,930.63 −47.12 (−0.59%)

USD Index 104.53 +0.36 (+0.34%)

• – US FOMC Member Williams Speaks at 01:30 (GMT+2);
• – Singapore Consumer Price Index (m/m) at 07:00 (GMT+2);
• – Eurozone Consumer Price Index (m/m) at 12:00 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US GDP (q/q) at 15:30 (GMT+2);
• – US Natural Gas Reserves (w/w) at 17:30 (GMT+2).
• – US FOMC Member Bostic Speaks at 17:50 (GMT+2);
• – US Crude Oil Reserves (w/w) at 18:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

The US stock market ended Tuesday’s trading lower amid negative dynamics from the consumer services, technology, and industrial sectors. Concerns over higher interest rates were again the main cause for concern. At Tuesday’s stock market close, the Dow Jones Index (US30) decreased by 2.06%, and the S&P 500 (US500) lost 2.00%. The NASDAQ Technology Index (US100) fell by 2.50% yesterday.

According to a preliminary report from S&P Global, the US PMI rebounded for the second month, rising to 50.2 from 46.8, beating expectations. Manufacturing business activity rose from 46.9 to 47.8, while the service sector increased from 46.8 to 50.5, returning to growth territory.

Walmart (WMT), the largest US retailer, issued gloomy forecasts for 2023, but it hasn’t affected the company’s stock much. Home Depot, Inc. (HD), the home improvement retailer, also issued a lower-than-expected earnings forecast due to higher supply chain costs and weak demand. Home Depot shares fell more than 5% on the report. Investors had hoped that retail earnings would offer some clues that the Federal Reserve was close to completing an interest rate hike. But the latest economic data suggests that the Fed still has room for 1-2 rate hikes. Perhaps today’s FOMC minutes will provide more concrete clues on that point.

According to JPMorgan strategists, it is too early to talk about a recession after the Federal Reserve’s aggressive campaign, especially since the impact of monetary policy on the economy may have a lag of one to two years.

In Canada, inflationary pressures continue to decline. The latest data showed that the annualized consumer price index fell from 6.3% to 5.9% (forecast 6.1%). Core inflation, which excludes food and energy, fell to 5.0% from 5.4% (5.5% forecast). On the back of such data, the Bank of Canada is not likely to raise interest rates further so as not to create additional pressure on the economy.

Equity markets in Europe were mostly down yesterday. German DAX (DE30) was 0.52% lower, French CAC 40 (FR40) fell by 0.37%, Spanish IBEX 35 (ES35) decreased by 0.34%, and British FTSE 100 (UK100) was 0.46% lower.

The main thesis of ECB head Christine Lagarde yesterday:

• The ECB intends to return inflation to 2%;
• How high the rates will depend on new data on inflation and the labor market;
• ECB intends to raise rates by 50 bps in March;
• There is no wage-price spiral in the Eurozone.

With strong economic data on business activity in the manufacturing sector, especially in the services sector, a 0.5% rate hike at the next meeting is almost a done deal for the ECB. That said, new rate hikes are also expected in May. With the US Fed likely to raise rates by 0.25% in March and 0.25% in May, the gap between the Fed and ECB rates will narrow, strengthening the European currency in the medium term.

Traders increased bets on a 0.25% Bank of England rate hike at the next meeting after the UK Manufacturing PMI rose to 49.2 from 47.2 last month (forecast 47.5). And in the services sector, the PMI returned to recovery territory, from 48.7 to 53.3 (forecast 49.2).

Putin’s speech yesterday indicated a further escalation of the war. The day after US President Joe Biden’s surprise trip to Kyiv, Vladimir Putin prepared a speech for his citizens. Putin’s speech did not hint at any policy change or immediate economic or political constraints on Russia’s ability to wage war. He repeated the largely familiar grievances that Russia is fighting a Western conspiracy to destroy it. It was also revealed yesterday that China would submit its proposal for peace talks between the two sides by the end of the week. But given that China is a strategic partner of Russia, Western leaders do not expect anything positive regarding Ukraine.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.21%, China’s FTSE China A50 (CHA50) gained 0.02%, Hong Kong’s Hang Seng (HK50) ended the day down by 1.71%, India’s NIFTY 50 (IND50) lost 0.10%, and Australia’s S&P/ASX 200 (AU200) ended the day slightly negative by 0.21%.

As expected, the Reserve Bank of New Zealand (RBNZ) raised the official monetary rate by 50 basis points. The rate rose from 4.25% to 4.75%, a 14-year-high. Also, the central bank said it expects further tightening as inflation remains too high.

S&P 500 (F) (US500) 3,997.34 −81.75 (−2.00%)

Dow Jones (US30)33,129.59 −697.10 (−2.06%)

DAX (DE40) 15,397.62 −79.93 (−0.52%)

FTSE 100 (UK100) 7,977.75 −36.56 (−0.46%)

USD Index 104.22 +0.36 (+0.34%)

• – Australia Wage Price Index (m/m) at 02:30 (GMT+2);
• – New Zealand RBNZ Interest Rate Decision at 03:00 (GMT+2);
• – New Zealand RBNZ Monetary Policy Report at 03:00 (GMT+2);
• – New Zealand RBNZ Press Conference at 04:00 (GMT+2);
• – German Consumer Price Index (m/m) at 09:00 (GMT+2);
• – German IFO Business Climate (m/m) at 11:00 (GMT+2);
• – US FOMC Meeting Minutes at 21:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By JustMarkets

The US stock market did not trade yesterday because of the holiday. Stock index futures traded in the European session, but there were no significant movements. The price traded in a narrow price range due to low volatility.

Meta Platforms (META), the parent company of Facebook and Instagram, said over the weekend that it was launching a paid subscription service that would offer features such as account verification, a move the company said would protect content generators.

Stock markets in Europe were mostly down yesterday. Germany’s DAX (DE30) decreased by 0.03%, France’s CAC 40 (FR40) lost 0.16%, Spain’s IBEX 35 (ES35) fell by 0.55%, and the British FTSE 100 (UK100) closed up by 0.12%.

Consumer sentiment in the Eurozone rose to its highest level in a year, a sign of resilience and growing hope that the region can avoid a recession this year.

The Swiss National Bank remains ready to be active in the foreign exchange markets to achieve its goal of price stability. This means that if the Swiss franc depreciates, the SNB will sell foreign currency. If the Swiss franc strengthens rapidly, the SNB will buy foreign currency in the right amount. This is necessary to keep the inflation rate. The rise in the value of the Swiss franc has helped reduce inflation caused by more expensive imports, while Switzerland’s hydroelectric power and nuclear power have helped reduce the impact of soaring energy prices.

US President Joe Biden made a surprise visit to Ukraine’s capital, Kyiv, on Monday, on the eve of the anniversary of Russia’s invasion of Ukraine. Biden said his visit should “reaffirm Ukraine’s unwavering commitment to democracy, sovereignty, and territorial integrity.” Over the weekend, US Secretary of State Antony Blinken said that China was considering providing Russia with military assistance and warned that any such action would “create a serious problem for us and in our relationship.” While Biden was in Kyiv, the State Department announced $460 million in additional US aid to Ukraine, including artillery ammunition, anti-tank systems, air defense radars, and $10 million for energy infrastructure. European Union High Representative for Foreign Affairs Josep Borrell said the bloc would approve additional sanctions before the anniversary of the conflict.

Crude oil prices rose yesterday after reports of delays in lifting US sanctions against Iran. The UN observers found a build-up of uranium enrichment that is only 6% below the level needed to make a nuclear bomb and well above the level needed to make fuel for reactors. This will complicate any attempt to lift US sanctions on Iranian oil exports. Saudi Energy Minister Prince Abdulaziz revealed yesterday that the OPEC+ group of oil exporters remains flexible on its production policy, despite last week’s announcement that existing production quotas would be frozen until the end of the year.

Gold prices recovered some of their losses late last week. But the fundamentals are still on the side of the bears. Much of gold’s decline was driven by US factors, particularly the Federal Reserve’s more aggressive behavior after stronger-than-expected economic data on the labor market and PPI inflation.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) gained 0.07%, China’s FTSE China A50 (CHA50) jumped by 2.31% yesterday, Hong Kong’s Hang Seng (HK50) ended the day up by 0.81%, India’s NIFTY 50 (IND50) decreased by 0.56%, and Australia’s S&P/ASX 200 (AU200) ended the day slightly positive by 0.06%.

New Zealand’s Central Bank is ready to cut the pace of interest rate hikes to half a percentage point Wednesday in response to signs that inflation has peaked in the wake of the devastating Cyclone Gabriel. 19 of 23 economists believe the Reserve Bank will raise the official interest rate from 4.25% to 4.75% at its Wednesday meeting.

The latest RBA meeting minutes showed that Australia’s central bank is considering further interest rate hikes of 25 or 50 basis points. Unlike the December minutes, there was no consideration of pausing the tightening cycle here. The RBA pointed to the “great breadth and resilience” of inflation and the “very large” amount of household savings to emphasize the need for higher borrowing costs.

S&P 500 (F) (US500) 4,079.09 0 (0%)

Dow Jones (US30)33,826.69 0 (0%)

DAX (DE40) 15,477.55 −4.45 (−0.03%)

FTSE 100 (UK100) 8,014.31 +9.95 (+0.12%)

USD Index 103.88 0 (0%)

• – Australia Manufacturing PMI (m/m) at 00:00 (GMT+2);
• – Australia Services PMI (m/m) at 00:00 (GMT+2);
• – Australia RBA Monetary Policy Meeting Minutes at 02:30 (GMT+2);
• – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
• – Japan Services PMI (m/m) at 02:30 (GMT+2);
• – French Manufacturing PMI (m/m) at 10:15 (GMT+2);
• – French Services PMI (m/m) at 10:15 (GMT+2);
• – German Manufacturing PMI (m/m) at 10:30 (GMT+2);
• – German Services PMI (m/m) at 10:30 (GMT+2);
• – Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+2);
• – Eurozone Services PMI (m/m) at 11:00 (GMT+2);
• – UK Manufacturing PMI (m/m) at 11:30 (GMT+2);
• – UK Services PMI (m/m) at 11:30 (GMT+2);
• – Germany ZEW Economic Sentiment (m/m) at 12:00 (GMT+2);
• – Canada Consumer Price Index (m/m) at 15:30 (GMT+2);
• – Canada Retail Sales (m/m) at 15:30 (GMT+2);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+2);
• – US Services PMI (m/m) at 16:45 (GMT+2);
• – US Existing Home Sales (m/m) at 17:00 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

By ForexTime 

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com