USDIndex settled at 101.50, Wall Street rallied on the back of tech amid ongoing hopes for a downshift in Fed rate hikes amid a potential moderation in inflation this week. Fears of a recession and the potential for the worst quarter of earnings in seven years were put aside for now. Microsoft announces today but news it is investing $10 bln in OpenAI, the maker of ChatGPT provided strong support for investors.
The USD Index failed to extend above 102, while it returned to 101.50, as Treasuries cheapened amid the gains in risk appetite and the pressure of upcoming supply, including $120 bln in shorter dated Treasury coupons and a hefty corporate calendar. EUR – is flirting with the 1.09 mark for 7th time the past 2 weeks. JPY – pullback to 129.70. GBP – holds above 1.2400. Today, UK public borrowing data showed a rise along with debt financing costs – the highest borrowing figure for December on record and a much higher number than anticipated. Stocks – The US500 breached 4058 but closed at 4019 (+1.19%), with the US100 up 11930 and the US30 +0.8%, to 33700. The Nikkei rallied 1.46% and European stock futures are higher. Logitech quarterly sales fell 22% as slowdown fears bite. Advanced Micro Devices AMD 9.22% added $6.46, or 9.2%, to $76.53 and Nvidia NVDA 7.59% rose $13.54, or 7.6% to $191.93. USOil – steady at $81.50, as USD decline and expectations of rising Chinese demand support crude prices. Gold – breaks 9-month high today, extending to $1,941.40 high. BTC – extends above 23,000 area. For how long?Today – German, Eurozone, UK and US flash S&P Global PMIs are due today. New Zealand and Australian Inflation for Q4 is also on tap.
Biggest FX Mover @ (07:30 GMT) USDJPY (-0.45%). Rejects 130.70 for a third day in a row. MAs aligned lower, MACD histogram & signal line are close to neutral zone. RSI 42 & flat, H1 ATR 0.200, Daily ATR 1.920.
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Andria Pichidi
Market Analyst
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