Spreadex Market Update
Musk To Buy Twitter Afterall – Stocks Rally As Dollar Dip Deepens
The big story in stocks today is more than 20% jump in Twitter that we saw yesterday in response to news that Elon Musk has revived his original offer to buy the company for $44 billion. The announcement saw Twitter’s stock price soar from around $42 to $52. Post-announcement.
The US Dollar continued its decline yesterday with the Dollar Index now sitting around 4% off highs. Given the hawkish sentiment being expressed by Fed members, the move still looks to be linked to position adjustments ahead of the NFP on the back of a weaker-than-expected JOLTs job openings release, more than the reigniting of any “Fed pivot” call.
EU leaders have reportedly reached a compromise during talks aimed at securing a new set of sanctions against Russia. The deal, which is due to be outlined today, is said to include a price-cap strategy for Russian energy on sales. Traders await further details today.
Key Factors for Today
- USD falls further on weaker JOLTS job openings data
- Equities rally amidst weaker USD and softer bond-yields
- EU leaders agree fresh sanctions on Russia – details due today
- GBP leading in FX, NZD stronger following RBNZ hike
- Metals and oil rallying – OPEC production cut expected today.
Coming Up
- Oil OPEC+ meeting
- USD US Trade balance
- USD US ADP Employment change
Equities Continue Higher Following Weak US Data
The ongoing soft-patch in the US Dollar has been good news for equities markets. The risk complex saw a further day of gains yesterday and most indices are seeing fresh demand across the European open on Wednesday. In the US, the Nasdaq and S&P are up 5.7% and 6.4% on the week, respectively. These moves have been echoed around the globe this week with stock prices benefiting from a softening in bond yields.
Greggs Jumps on Sales Growth
In the UK, Greggs Bakery shares are up around 15% this week following reports of unexpected sales growth. Looking at the last quarter, Greggs posted a 14.7% annual increases in sales with a 9.7% increase in like-for-like sales. The figures show that company
has shrugged off recent price rises put in place over the last year.
GBP Rally Continues
In FX, GBP remains the strongest currency as we push on into the middle of the week. The government’s tax U-turn along with expectations further, aggressive BOE tightening, is helping keep GBP underpinned here.
RBNZ Hikes by 50bps, Considered 75bps
NZD has been stronger today also on the back of the latest RBNZ hike overnight. The central bank increased rates by a further 50bps while noting that it mulled a larger 75bps hike. The bank cited still-too-high inflation as the main issue while fretting over the impact a weaker NZD would have on the economy. This marks the 8 th consecutive hike from the bank with more signalled to come.
Metals & Oil Continue higher – OPEC On Watch
In the metals and commodities space, it’s been a great week so far for gold and silver. Both metals are rallying firmly amidst the drop in USD. Focus today will now be on the ADP employment number. If the release fuels further weakness we should see metals continue higher into the NFP. Oil prices are rallying here also with crude futures up around 14% on the week. Along with the weaker US Dollar, crude is being lifted by expectations that OPEC+ will today announce a large production-cut package aimed at further bolstering prices.
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