Spreadex Market Update
USD Shrugs Off Durable Goods Miss – Brexit Deal in Sight
A choppy day for markets yesterday as traders digested the latest US data and Fed comments along with the headlines regarding the latest Brexit developments. USD softened a little initially on the session as the January durable goods number came in below expectations. However, the resultant strength in equities markets was curtailed somewhat by comments from Fed’s Jefferson who once again cautioned that inflation was still far from the Fed’s target and would require sustained action this year to be brought under control.
In the UK, the big news yesterday was that of the UK and EU finally agreeing a compromise over the Northern Ireland protocol to provide a fresh set of trade terms. Now approved by both sides, the ‘Windsor Framework’ will be subject to a parliamentary vote in the UK though there is still some uncertainty over whether the DUP will back the deal.
Key Factors for Today
- USD back in demand today following hawkish Fed comments – consumer confidence data up next
- Equities choppy yesterday – Brexit headlines providing some boost – eurozone inflation concerns offsetting
- Zoom beats Q4 earnings forecasts
- EUR rallies on hawkish ECB comments/expectations – GBP boosted by Brexit news
- Metals under pressure – oil holding up
Coming Up
- USD – CB Consumer Confidence
- CAD – GDP
- USD – Richmond Fed Manufacturing Index
Equities Choppy Around Data Stream
With the US Dollar seeing a better start across the European open today, equities prices have softened a little. In the UK, the rally in GBP fuelled by yesterday’s Brexit news has dampened the rally in the FTSE while in the US stocks remain near the bottom of the recent correction lower. In Europe, a mixed bag of regional data this morning is seeing muted action in the Dax with Spanish CPI coming in above forecasts while French CPI was seen undershooting expectations though still higher on the prior month.
Zoom Beats Q4 Earnings Forecasts
In the US earnings season landscape, Zoom managed to defy fears over weaker demand to post a solid set of Q4 earnings yesterday. The company posted Q4 EPS of $1.22 vs $0.81 expected on revenues of $1.18 billion vs $1.1 billion forecast. Today, attention shifts to HP and Occidental Petroleum which are both due to report.
EUR Rallying & Hawkish ECB Comments
EUR has been the best performer across the European open today. The rally comes amidst yet another set of hawkish comments this time from ECB’s Boris Vujcic who said that the ECB must push on with further rate hikes this year to bring core inflation down. Regional inflation data today show that prices are still on the rise in key eurozone economies, keeping the pressure on the ECB to act.
Metals Slide Lower – Crude Holding On
In the metals and commodities space, both gold and silver remain under pressure today as fresh strength in the US Dollar keeps metals pressured. Today’s US consumer confidence data might see the selloff deepen if USD receives further support. Crude prices are remaining resilient for now. Despite a stronger USD, crude has yet to break lower with futures prices back in the green today reports of reduced Russian output keep the market underpinned here.
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