Spreadex Market Update
Fed minutes reaffirm hawkish 2023 Rates outlook
Equities Mixed Following Hawkish FOMC Minutes
Equities prices remain fairly muted as traders continue to return their desks following the break for the holidays. US stocks have been the most constrained so far this week with the S&P and Nasdaq treading water in prior ranges as traders await Friday’s data. The DAX has been the best performer so far with the index seen rallying firmly yesterday as traders continue to digest better eurozone data over the prior week. The Nikkei is threatening to break down to fresh lows with fears over China covid numbers seen limiting sentiment. Today’s ADP release is likely to have some impact ahead of the NFP on Friday.
CHF Sees decent Demand
In FX, a stronger start for the Dollar on the back of yesterday’s FOMC minutes has seen weaker action across the G10 space. However, CHF remains well bid, reflecting better safe-haven demand for the currency.
GBP Struggling
GBP has been among the weaker performers today. The UK currency appears to have derived little support from PM Rishi Sunak’s pledge to ‘fix the UK’ this week. A combination of elevated inflation, rising covid cases and widespread industrial actions, have seen UK investor sentiment weakening at the start of 2023.
Gold Rally Pauses, Crude Weak Following Bearish Reversal
In the metals and commodities space, both gold and silver have started the day a little softer amidst fresh USD strength. Gold prices had been firmly higher yesterday, breaking out to their highest levels since early June 2022 amidst the downturn in USD se saw yesterday ahead of the FOMC minutes. Crude prices are looking more stable across early European trading today. However, sentiment remains weak with crude futures having already shed around 10% this week as China covid fears and global recession concerns create headwinds for the market.
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