English (India)
24
Jan

GE, Verizon Earnings, Eurozone PMI, Richmond Fed Index

calendar 24/01/2023 - 08:38 UTC

The dollar recovered from its weakness at the start of the week with the USDX index trading at the end of the day unchanged compared to Friday. However, by Tuesday the dollar again weakened against most other majors. The USD/ZAR pair meanwhile continued climbing throughout the new week ahead of the South African Reserve Bank’s rate decision scheduled for Thursday. Reuters reports that while many economists they surveyed believe a 50 bp rate hike could be announced, there is no clear consensus such a decision will be announced as many respondents to the survey also believed in a 25 bp or no hike at all.

Some of the major cryptos like the Binance Coin and Bitcoin managed to move slightly to the upside this week with the latter again trading at times above $23k. At the same time Ethereum continued to trade side-ways and was trading by Tuesday morning still below $1,650.

While U.S. stock market indices like the US 500 and US Tech 100 reached a new high for this month, many European indices like the Europe 50 and Italy 40 moved up at a much slower pace, remaining well below the high from last week. Meanwhile the UK 100 trading by Tuesday morning down by more than 0.7% contrary to the relatively positive sentiment in other markets. Asian markets including the Japan 225 Yen and the China A50 also rallied with the latter opening with a sizable gap to the upside following the Chinese New Year Holiday trading break.

On Tuesday the weekly Redbook store sales statistic will be published as well as the Richmond Fed Manufacturing Index for January. Later during the Asian-Pacific trading session Australian and New Zealand consumer price index (CPI) statistics for the fourth quarter of the past year will be released.

EUR/USD

While the dollar recovered from its weakness over the course the day after reaching intraday a new high in the EUR/USD pair, the sentiment was still pointing against the dollar with the EUR/USD pair approaching the 1.09-mark again by Tuesday morning.

On Tuesday PMI survey results for Germany and the eurozone will be published. Some analysts hope that with the positive momentum from the past releases that the eurozone service PMI could even climb from the previous 49.1-level above 50, which would symbolize an overall rather positive sentiment. The French Business Climate Indicator released earlier was already better than anticipated, improving from 101 to the level of 103.

EUR/USD

Gold

After ending the first trading day of the week only with a small upside after recovering from the initial weakness, gold continued to rally towards a new nine months high by Tuesday morning. Even climbing rates, like the 10-year U.S. T-Note benchmark at times again exceeding 3.5% could not stop the positive momentum.

The performance seemed also to a significant de-coupled from the movements in other precious metal markets as silver closed deep in the red on Monday with the recovery seen on Tuesday far from enough to offset this move to the downside. A similar move could be observed also in the palladium market.

Gold

WTI Oil

Oil prices settled on Monday lower compared to the closing rate from Friday despite initially oil prices appearing to rise with the generally observable positive market sentiment.

This week the Weekly Statistical Bulletin by the American Petroleum Institute (API) will be released as usual on a Tuesday, while on Wednesday the Weekly Petroleum Status Report from the Energy Information Administration (EIA) can be expected. Both reports contain data on crude oil, gasoline and distillate inventories in the U.S.

WTI Oil

US 500

Stock markets rallied for the second trading day in a row with the US 500 with ease now surpassing the 4,000-threshold. Major tech companies also made very significant gains with the FANG+ (+4.07%) closing at a new four months high.

The chip sector (US Semiconductors ETF +4.82%) was once again clearly outperforming most other sectors with three of top five best-performing components of the S&P 500 on Monday coming from the sector including AMD (+9.28%) and Nvidia (+7.70%).

This week even more earnings can be expected including from companies like Halliburton, General Electric, Verizon, Lockheed Martin and others publishing their respective results on Tuesday, while on Wednesday US Bancorp, Tesla, IBM, and Crown Castle are releasing their numbers.

US 500

The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.

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