‘A “very tight” job market and unabated inflation might require the Federal Reserve to raise interest rates sooner than expected and begin reducing its overall asset holdings as a second brake on the economy, US central bank policymakers said in their meeting last month.’ – Reuters
Stocks tanked, Yields spiked and the USD held firm as EM & commodity currencies sank.
- USD (USDIndex 96.30) holds gains supported by higher yields – pressuring the commodity complex in particular. US stocks tanked (Dow & S&P) down -1% & -1.94% respectively with NASDAQ losing 522 points -3.34%
- US Yields 10-yr rocked up to close at 1.70% trades higher again at 1.73% now.
- Equities – USA500 -96 (-1.94%) at 4700 TSLA -5.35%, AT&T +2.22%. As value stocks gained and growth stocks were hit the hardest, USA500 FUTS now 4691.
- USOil – spiked over $78.00 trades at $76.84 inventory drawdown not as big as expected and a big build in gasoline storage
- Gold – down to $1800 sagain after test & rejection of 1830.
- Bitcoin sinks under holds over 45,000, trades at 43,200 now.
- FX markets – EURUSD back to 1.1285, USDJPY off 5-yr highs under 116.00 at 155.90, Cable tested 1.3600 aback to test 1.3500 now.
Overnight – Chinese Services PMI’s & German Factory Orders both better than expected. Asian share followed US lower –
European Open – Risk-Off – The March 10-year Bund future is down -38 ticks, underperforming versus Treasury futures. Overnight and mounting concern of an accelerating tightening schedule in the US has been adding to pressure on stock markets overnight. DAX and FTSE 100 futures are currently posting losses of -1.5% and -1.4% respectively and US futures are down -0.3-0.6% with the NASDAQ future underperforming as tech stocks continue to struggle.
Today – Preliminary German inflation data for December, Eurozone PPI, final UK Services PMI, US Weekly Claims, ISM Services PMI and US Factory Orders.
Biggest FX Mover @ (07:30 GMT) AUDJPY (-1.10%) RISK OFF Fed inspired tank to Sank to 82.90 from 84.34 yesterday. MAs aligned lower, MACD signal line & histogram lower & well below 0 line. RSI 16.06 and significantly OB, H1 ATR 0.1820 Daily ATR 0.8000.
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Stuart Cowell
Head Market Analyst
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