Spreadex Market Update
USD Weaker on Monday As Traders Await Wednesday’s FOMC Minutes
The US Dollar drifted lower over a quiet start to the week yesterday with little in the way of news and North American markets offline for President’s Day in the US and Family Day in Canada. However, today promises to be much eventful with a slew of key data releases due. In the UK, eurozone and US we’ll get the latest round of business activity surveys due with PMI data for each economy as well as Canadian CPI for January. PMI data sets are broadly pegged to improve which should help dilute recession fears near-term. However, in the US, better data might add to the risks of a hawkish FOMC in March, leaning on equities prices and pushing USD back up.
Key Factors for Today
- USD climbing again following soft start on Monday
- PMIs due today for eurozone, UK and US – Bullish risks for USD on any upside strength
- Walmart due to report Q4 earnings today
- Equities shaky as USD sees better demand
- AUD falls despite hawkish RBA minutes
- Metals fall – oil stabilises
Coming Up
- EUR – Flash services & manufacturing PMIs
- UK – Flash services & manufacturing PMIs
- USD – Flash services & manufacturing PMIs
Equities Lower Amidst USD Rebound
Equities markets were mostly lower yesterday, despite the quiet flows on Monday, as traders brace for tomorrow’s FOMC minutes. On the back of the recent run of better-than-expected US data, expectations have shifted back in favour of either more aggressive tightening, or longer tightening, from the Fed, which is acting as a headwind to equities for now. The latest round of PMI data sets will be closely watched today with EU and UK asset prices likely to rally should we see some improvement.
Walmart Earnings on Watch
US earnings season gets back on track today with Walmart and Coinbase the key names to watch. Walmart is always a focus point over earnings season, often season as a bellwether for the US economy given the size of the company. Wall Street is looking for EPS of $1.518 on revenues of $159 billion, which would mark an increase on the prior quarter.
AUD Falls Despite Hawkish RBA Minutes
A better start for the US Dollar today is creating some drag across FX markets, particularly for high-beta currencies like AUD and NZD. Overnight, the RBA minutes were surprisingly hawkish showing that the bank had considered a larger 50bps hike before opting for the smaller .25% increase. Looking ahead, members agreed that further rate hikes would be needed to bring inflation down though also agreed that inflation had likely peaked in December.
Metals Fall, Oil Stabilises
In the metals and commodities space, both gold and silver have come back under selling pressure today as USD begins to wake up again. Looking ahead, today’s US PMI readings hold the potential to drive USD higher still, creating more downside risk for metals. Crude prices are little more stable across the European open on Tuesday following the weakness seen yesterday. Any fresh strength in USD will likely curtail this however.
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.
