Stock markets crushed into close; NASDAQ led the fall (-3.74%) after abysmal META (-26.39%) earnings. More mixed PMI data, and Hawkish surprises from BoE (25bps rise but more to come as 4 of 9 members wanted 50bps) & ECB (dovish statement but Hawkish Lagarde press conference – end of stimulus & rate hikes as early as September?). Asia markets higher following blockbuster AMZN (+15% after hours) earnings. USD tanked & Yields & Oil rallied & Gold holds over $1800. Biden: Russia plotting fake invasion pretext, US kills head of ISIS. Johnson: 4 top aids all resign in one day. Winter Olympics kick off. Putin expected to meet Xi.
China, Hong Kong and other markets remained closed for the Lunar (Tiger) New Year holidays.
- USD (USDIndex 95.25) worst day in a long time – opened the week at 97.25, 96.00 now major resistance & 95.00 support.
- US Yields 10-yr closed at 1.827 & trades at 1.81%.
- Equities – USA500 -111 (-2.44%) 4477 – (FB -26.39%, AMZN -7%, but +15% after hours) USA500 FUTS recovered to 4518. SNAP (-23% on the day & then +59% after hours).
- USOil – Spiked over $89.00 and trades at $88.84 now.
- Gold – fell to $1788 back to $1807 now.
- Bitcoin remains under $40,000 back to test $37,800
- FX markets – EURUSD up to 1.1465 USDJPY up to 115.00 & Cable to 1.3580
Overnight – RBA Mins. repeats ‘prepared to be patient’ mantra, German Industrial Orders, much stronger than anticipated +2.8%.
European Open – Treasuries have recovered earlier losses, but Bunds and other Eurozone bond markets remain under pressure as stronger than expected German orders at the start of the session add to the arguments for a change of course in March, which judging by Lagarde’s comments clearly is on the agenda next month, when the updated set of staff projections are also available.
DAX and FTSE 100 futures are posting gains of 0.6% and 0.8% respectively, with the Euro Stoxx 50 up 0.7%. A 2.2% rise in the NASDAQ meanwhile is leading US futures higher.
Today – EZ/UK Construction PMI, EZ Retail Sales, US & Canadian Labour Market Reports. Earnings Carlsberg, Sanofi, Bristol-Myers, and AON.
Biggest FX Mover @ (07:30 GMT) EURAUD (+0.59%) Rallied from key 1.5800 Wednesday to over 1.6100 now. MAs aligned higher, MACD signal line & histogram levelling off but well over 0 line, RSI 80 & OB, H1 ATR 0.0024 Daily ATR 0.0120.
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Stuart Cowell
Head Market Analyst
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