InvestMacro

By JustMarkets

As of Wednesday’s stock market close, the Dow Jones Index (US30) decreased by 0.26%, while the S&P 500 Index (US500) added 0.08%. The NASDAQ Technology Index (US100) closed positive by 0.36%. Optimism about the US economic outlook and strong corporate earnings results boosted stock prices on Wednesday.

Strong earnings from technology companies supported the broader market, as Netflix (NFLX) closed higher by more than 10% after reporting fourth-quarter streaming pay-per-view numbers well above consensus. Additionally, shares of ASML Holding NV rose more than 8% and led gains in chip stocks after reporting record Q4 orders, indicating the strength of the semiconductor industry.

S&P’s US manufacturing PMI for January unexpectedly rose by 2.4 to 50.3, beating expectations for a decline to 47.6 and showing the fastest pace of growth in 15 months.

On Wednesday, the Bank of Canada (BoC) left its key overnight rate at 5% and said that while core inflation is still a concern, the bank is focusing on when to lower borrowing costs rather than whether to raise rates again. Bank of Canada Governor Maclem said at a press conference that the Bank of Canada is not yet ready, willing, or able to go soft on interest rates but hinted that a rate cut is around the corner.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 1.58%, France’s CAC 40 (FR40) gained 0.91% yesterday, Spain’s IBEX 35 (ES35) added 1.16%, and the UK’s FTSE 100 (UK100) closed positive by 0.56%.

The Eurozone Manufacturing PMI for January rose by 2.2 to a 10-month high of 46.6, which was stronger than expectations of 44.7.

Today, the ECB will hold its first monetary policy meeting of the year on Thursday. There is no chance of a policy change at this meeting, but ECB President Lagarde’s press conference at 15:45 will play an important role in shaping expectations going forward. The ECB now depends on incoming data on inflation, production, GDP, and the labor market. And Lagarde is likely to talk about it at the press conference. The currency market is unlikely to react strongly to the ECB statement unless Lagarde specifies the timing of the rate cut. If there are clear signals about the timing of the rate cut, it could lead to a strong price imbalance.

WTI crude oil prices strengthened above $75 a barrel on Thursday, hovering near one-month highs, as a significant drawdown in US crude inventories helped boost oil prices. Official data showed US crude inventories fell by 9.233 million barrels last week, the biggest decline since August and beating market expectations for a 2.15 million barrel drop. Fresh stimulus measures in China, the largest oil importer, also contributed to the bullish sentiment, with the People’s Bank of China announcing that it will lower the reserve requirement ratio for banks next month in an attempt to support the country’s struggling economy. In addition, geopolitical tensions persisted as a coalition led by the US and UK strikes Houthi militants in Yemen, who are responsible for numerous attacks on commercial ships in the Red Sea.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.80%, China’s FTSE China A50 (CHA50) jumped by 1.28%, Hong Kong’s Hang Seng (HK50) was up by 3.56% by Wednesday’s close, and Australia’s ASX 200 (AU200) was positive by 0.06%.

On Wednesday, the People’s Bank of China (PBOC) cut the reserve requirement ratio for banks by 50 bps to 10.00%, which will boost liquidity and help revive the Chinese economy, which is favorable for global growth prospects. PBOC also noted that more measures will be taken soon to stimulate economic growth. These signals helped Chinese markets bounce off multi-year lows.

Singapore’s central bank (MAS) is expected to leave its monetary policy unchanged this month on January 29 and refrain from easing sentiment until it has more evidence that inflation is falling consistently. Inflation in Asia’s financial center remains stable. It was 3.2% in November and 3.3% in December, down from a peak of 5.5% in early 2023.

S&P 500 (US500) 4,868.55 +3.95 (+0.08%)

Dow Jones (US30) 37,806.39 −99.06 (−0.26%)

DAX (DE40) 16,889.92 +262.83 (+1.58%)

FTSE 100 (UK100) 7,527.67 +41.94 (+0.56%)

USD Index  103.31 −0.31 (−0.30%)

• – German Ifo Business Climate (m/m) at 11:00 (GMT+2);
• – Norwegian Norges Interest Rate Decision at 11:00 (GMT+2);
• – Eurozone ECB Interest Rate Decision at 15:15 (GMT+2);
• – Eurozone ECB Monetary Policy Statement at 15:15 (GMT+2);
• – US Building Permits (m/m) at 15:30 (GMT+2);
• – US Core Durable Goods Orders (m/m) at 15:30 (GMT+2);
• – US GDP (q/q) at 15:30 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – Eurozone ECB Press Conference at 15:45 (GMT+2);
• – US New Home Sales (m/m) at 17:00 (GMT+2);
• – Eurozone ECB President Lagarde Speaks at 17:15 (GMT+2);
• – US Natural Gas Storage (w/w) at 17:30 (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

At Tuesday’s stock market close, the Dow Jones Index (US30) was down by 0.25%, while the S&P 500 Index (US500) added 0.29% yesterday. The NASDAQ Technology Index (US100) closed positive by 0.43%.

Economic news from the US on Tuesday was weaker than expected. The Richmond Fed’s January index of current conditions in the manufacturing sector unexpectedly fell by 4 to a 3-year low of negative 15, weaker than expectations of a rise to negative 8.

Markets are discounting the odds of a 25 bps rate cut at 3% at the next FOMC meeting on January 30-31 and 48% for the same 25 bps rate cut at the March 19-20 meeting. As recently as a week ago, the probability of a rate cut in March was 60%.

Verizon Communications (VZ) shares are up more than 6% after its 2024 adjusted EPS forecast beat consensus. The Dow Jones Industrials Index spent the day in negative territory as shares of 3M Co. (MMM) closed down more than 11% after its 2024 adjusted earnings forecast came in below consensus.

The Bank of Canada (BoC) will hold its first monetary policy meeting of the year today. Like other G10 central banks, the Bank of Canada is not yet ready to cut rates. The BoC is expected to keep rates at 5%. Policymakers continue to talk about their willingness to “raise rates further if necessary,” and inflation continues to rise faster than desired. But for the March meeting, the probability of keeping the rate on hold has fallen from 100% to 66% over the past week, so investors’ main focus will be on the monetary policy report, where the BoC’s new projections will be unveiled, and on Bank Governor Macklem’s remarks at the post-meeting press conference. The focus should be on the GDP and inflation forecasts. If the GDP forecast turns out to be positive and the inflation forecast is down, it could put pressure on the Canadian dollar, as it will increase the probability of a rate cut at the March meeting. But we should not forget that the Canadian dollar is a commodity currency and is highly correlated with oil prices. Taking into account the aggravation of the geopolitical situation in the Middle East, the growth of oil prices may further stimulate the growth of the Canadian dollar or keep the CAD from excessive decline.

Equity markets in Europe were mostly down on Tuesday. Germany’s DAX (DE40) fell by 0.03%, France’s CAC 40 (FR40) lost 0.34% yesterday, Spain’s IBEX 35 (ES35) decreased by 1.09%, and the UK’s FTSE 100 (UK100) closed negative by 0.03%.

The Eurozone Consumer Confidence Index for January unexpectedly fell by 1.0 to negative 16.1, which was weaker than expectations of a rise to negative 14.3. Today, manufacturing PMI and service PMI statistics for many European countries will be released. These data will show how business activity, which was in contractionary territory in most countries at the beginning of the year, is progressing. A slight improvement in the business activity indicators is forecast.

On Wednesday, Germany’s Ifo Institute downgraded its economic growth forecast for 2024 again, citing uncertainty caused by changes to the federal budget triggered by a constitutional court ruling. The institute now expects Europe’s largest economy to grow by 0.7% this year instead of 0.9%.

Asian markets traded mixed yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.08%, China’s FTSE China A50 (CHA50) was down by 0.78%, Hong Kong’s Hang Seng (HK50) jumped by 2.63% by Tuesday’s close, and Australia’s ASX 200 (AU200) was positive by 0.51%.

Alibaba Group (BABA) led the Hang Seng gains, rising by 5% following reports that co-founders Jack Ma and Joe Tsai purchased shares of the largest e-commerce company totaling $200 million in the fourth quarter.

Japan’s exports rose at the fastest pace in a year last month, raising the likelihood that the economy will resume growth in October-December. Exports rose by 9.8% in December from a year earlier, the biggest jump in a year and reversing a 0.2% drop in the previous month. Imports fell by 6.8% compared to economists’ forecast of a 5.4% decline. The data suggests that external demand will have less of an impact on the economy in the fourth quarter, contributing to the recovery.

Consumer inflation in New Zealand in the fourth quarter was in line with expectations. Annual inflation was 4.7% in the fourth quarter, slower than the 5.6% in the third quarter. Inflation is now at its lowest level since mid-2021. However, some closely watched indicators of underlying inflationary pressures were stronger than the Reserve Bank of New Zealand (RBNZ) had forecast. Non-traded inflation was 5.9% rather than 5.7%, and the core reading, which excludes the most significant ups and downs, was around 5%. Therefore, despite the obvious weakness in the New Zealand economy, most analysts expect the Reserve Bank to maintain its hawkish stance.

S&P 500 (US500) 4,864.60 +14.17 (+0.29%)

Dow Jones (US30) 37,905.45 −96.36 (−0.25%)

DAX (DE40) 16,627.09 −56.27 (−0.34%)

FTSE 100 (UK100) 7,485.73 −1.98 (−0.03%)

USD Index  103.53 +0.16 (+0.20%)

• – Australia Manufacturing PMI (m/m) at 00:00 (GMT+2);
• – Australia Services PMI (m/m) at 00:00 (GMT+2);
• – Japan Trade Balance (m/m) at 01:50 (GMT+2);
• – Japan Manufacturing PMI (m/m) at 02:30 (GMT+2);
• – Japan Services PMI (m/m) at 02:30 (GMT+2);
• – Germany Manufacturing PMI (m/m) at 10:30 (GMT+2);
• – Germany 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);
• – US Manufacturing PMI (m/m) at 16:45 (GMT+2);
• – US Services PMI (m/m) at 16:45 (GMT+2);
• – Canada BoC Interest Rate Decision at 17:00 (GMT+2);
• – Canada BoC Monetary Policy Report at 17:00 (GMT+2);
• – US Crude Oil Reserves (w/w) at 17:30 (GMT+2);
• – Canada BoC Press Conference 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

At Monday’s stock market close, the Dow Jones Index (US30) increased by 0.36%, while the S&P 500 Index (US500) gained 0.22% yesterday. The NASDAQ Technology Index (US100) closed positive by 0.32%. All three indices once again set new record highs. Stocks rose on Monday amid optimism about the US economic outlook and expectations of strong quarterly corporate earnings results. In addition, a decline in government bond yields on Monday supported stocks. Companies such as Netflix (NFLX), Tesla (TSLA), and Intel (INTC) will also report this week.

FOMC officials have traditionally kept quiet this week ahead of next week’s Fed meeting. Markets are discounting the odds of a 25 bps rate cut at 3% for the January 30-31 FOMC meeting and 42% for the same 25 bps rate cut at the March 19-20 meeting.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 0.77%, France’s CAC 40 (FR40) gained 0.56% yesterday, Spain’s IBEX 35 (ES35) added 1.11%, and the UK’s FTSE 100 (UK100) closed positive by 0.35%.

European equity markets opened higher on Tuesday, likely extending gains from the previous session amid improving risk sentiment. However, investors remained cautious ahead of the European Central Bank’s decision later this week. The ECB is expected to keep interest rates unchanged, but policymakers have disagreed with predictions of an imminent rate cut.

WTI crude oil prices held just below $75 a barrel on Tuesday, near their highest levels in four weeks, as fresh strikes by US and British troops on Houthi targets in Yemen heightened fears of a wider conflict in the region that could disrupt supplies. Meanwhile, the resumption of production from Libya’s largest field and signs of rising output, especially from non-OPEC countries, continued to weigh on the oil market. On the demand side, the IEA revised its forecast for oil demand growth in 2024 to 1.24 million bpd, up 180,000 bpd, citing improved economic growth and lower oil prices in Q4. OPEC also maintained its forecast for oil demand growth of 2.25 million bpd in 2024, with 1.85 million bpd growth expected in 2025.

Asian markets traded mixed on Monday. Japan’s Nikkei 225 (JP225) gained 0.72% yesterday, China’s FTSE China A50 (CHA50) was down by 0.72%, Hong Kong’s Hang Seng (HK50) fell by 2.25% on Monday, and Australia’s ASX 200 (AU200) was positive by 0.51%.

The Bank of Japan (BoJ) unanimously kept its key short-term interest rate unchanged at negative 0.1% and the 10-year bond yield at around 0% at its January meeting, as expected. The Central Bank also kept the upper limit on long-term government bond yields unchanged at 1.0%. Meanwhile, in its quarterly outlook report, the BoJ lowered its CPI target for fiscal 2024 to 2.4% from October’s forecast of 2.8%, reflecting the recent decline in oil prices. For 2025, the BoJ said it expects core inflation at 1.8%, up slightly from previous estimates of 1.7%. On economic growth, policymakers lowered their GDP growth forecast for 2023 to 1.8% from 2.0% in previous projections. For FY 2024, the bank revised its GDP forecast upward to 1.2% from 1.0%, helped by pent-up demand. BoJ Governor Kazuo Ueda recently stated that he sees no need for an immediate change in the BoJ’s dovish stance.

Singapore’s annual inflation rate unexpectedly rose to 3.7% in December 2023 from November’s 25-month low of 3.6%, exceeding market forecasts of 3.5%. Annual core inflation (excluding food and energy prices) rose to 3.3% in December from 3.2% in November, beating forecasts for a  3.1% rise.

The offshore yuan rose to 7.18 per dollar, hitting its highest level in nearly two weeks after China’s cabinet pledged again to stabilize capital markets. China’s premier of the State Council held a cabinet meeting on Monday, where officials said they intend to take stronger and more effective measures to stabilize market confidence. Policymakers are reportedly seeking to channel about 2 trillion yuan, mostly from the offshore accounts of Chinese state-owned enterprises, into a fund to buy mainland stocks.

S&P 500 (US500) 4,850.43 +10.62 (+0.22%)

Dow Jones (US30) 38,001.81 +138.01 (+0.36%)

DAX (DE40) 16,683.36 +128.23 (+0.77%)

FTSE 100 (UK100) 7,487.71 +25.78 (+0.35%)

USD Index  103.17 −0.16 (−0.15%)

• – Japan BoJ Interest Rate Decision at 04:30 (GMT+2);
• – Japan BoJ Monetary Policy Statement at 04:30 (GMT+2);
• – Singapore Consumer Price Index (m/m) at 07:00 (GMT+2);
• – Japan BoJ Press Conference at 08:30 (GMT+2);
• – US Richmond Manufacturing Index (m/m) at 17:00 (GMT+2);
• – New Zealand Consumer Price Index (q/q) at 23:45 (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