Spreadex Market Update
European Stocks Climb Amidst Weaker USD & Lower Energy Prices
Despite many projections (central banks, IMF, OECD) citing global recession risks for 2023, risk sentiment remains strong into the second trading week of the year. Equities and commodities are seeing solid demand across the board on Tuesday as the US Dollar continues to head lower from Friday’s US labour data. In Europe saw broad-based gains in asset markets on Monday as the peak-inflation narrative continues to drive markets suggesting that traders anticipate that central banks might end up being less hawkish this year than currently projected. However, in the US comments from Fed’s Bostic and Daly suggesting the Fed would need to hike rates over 5% rattled investors.
Key Factors for Today
- USD fall continues as peak-inflation narrative gathers weight – Powell up next
- Mixed action in equities – European stocks take the lead as Dax breaks out
- Risk FX continues to lead with EUR well bid also – JPY remains soft on Tuesday
- Gold prices break out to fresh highs
- Silver and crude both turn lower
Coming Up
- CAD – BOC’s Macklem speaks
- JPY – BOJ’s Kuroda speaks
- USD – Fed’s Powell speaks
Equities Mixed – European Stocks Climb
Equities markets saw mixed action on Monday with initial strength in US stocks curtailed later in the session. UK stocks mapped a similar trajectory, ending the day in the red. However, European assets were the standout winners yesterday with firm buying seen once again across the European open on Tuesday. The Dax has broken out to fresh highs on the year, testing its highest levels since March 2022 as weaker eurozone inflation and lower gas prices combine to help lift sentiment. Today traders will be keen to receive comments from Fed’s Powell who speaks later, keen to see how the Fed addresses the latest US labour report as well as its early guidance for Q1.
Risk FX Remains In the Lead
The decline in USD is allowing for a broad recovery in G10 FX against the Dollar. Risk currencies continue to be the strongest beneficiaries with AUD and NZD leading the charge against USD. EUR too remains well bid while JPY continues to weaken on softened safe-haven demand. A quiet data sheet today means that focus will land on comments from BOC governor Macklem, BOJ’s Kuroda and Fed chairman Powell who each speak today.
Gold Continues Higher but Silver & Oil Suffer
In the metals and commodities space, gold and silver have seen a split this week with gold prices continuing to trade higher, benefiting from a weaker USD, while silver prices have turned lower. Mixed performance in stocks as well as some hesitance around China reopening (given the covid situation) is weighing on sentiment in silver. Crude prices have seen more muted trading so far this week. Initial gains were tempered yesterday with crude futures coming under selling pressure on Tuesday reflecting uncertainty around China reopening.
It's easy to open an account
- Fill in our simple online application form
- Fund your account
- Start trading the global markets instantly!
SEARCH FOR AN ARTICLE:
Enter a keyword and search for all relevant articlesMARKET ANALYSIS
RECENT POSTS
DISCLAIMER
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investors lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money. For professional clients, spread betting and CFD trading can also result in losses larger than your initial stake or deposit.
Spreadex Ltd is authorised and regulated by the Financial Conduct Authority, provides an execution only service and does not provide advice in any way. Nothing within this update should be deemed to constitute the provision of investment advice, recommendations, any other professional advice in any way, or a record of our trading prices. This update does not constitute or form part of an offer of, or solicitation for a transaction in any financial instrument, nor shall it or the fact of its distribution form the basis of, or be relied on in connection with, any contract therefore. Any persons placing trades based on their interpretation of the comments or information within this update does so entirely at their own risk.
No representation, warranty, or undertaking, express or limited, is given as to the accuracy or completeness of the information or opinions contained within this update by Spreadex Ltd or any of its employees and no liability is accepted by such persons for the accuracy or completeness of any such information or opinions. As such, no reliance may be placed for any purpose on the information and opinions contained within this update.
The information contained within this update is the intellectual property of Spreadex Ltd and is protected by UK and International copyright laws. All rights reserved. Users may however freely download, distribute and reproduce extracts of the contents, subject always to accrediting Spreadex Ltd as the source and providing a hyperlink to www.spreadex.com.
