The greenback continues to hesitate
The USD gained in the FX market yesterday, yet the gains were limited, and today tended to stabilise. We note that the GBP weakened against the USD, as political instability seems to emerge after the local election yesterday ranking the governing Labour party third.
On the other hand we note the slight strengthening of the JPY which could be expanded given the Japanese Finance minister remarks, implying a possible market intervention should JPY weaken substantially. Given the acceleration of France’s preliminary HICP rate for February, we intend to keep a close eye on the release of the Germany’s HICP rate for the same month, while in the American session we highlight the release of the US PPI rates for January and the Atlanta Fed GDP now rate for Q1.
Xlence Research Team opinion
Overall the USD is expected to continue to wobble in search of a catalyst which could provide new direction for the greenback. On the other hand, accelerating inflationary pressures in Germany may start pushing the common currency higher, while see the risk related to the JPY as tilted more to the upside, given the threat of Japan’s Finance Minister Ms Katayama.
US stock markets not convinced
Major US equity market indexes were on the retreat yesterday. The release of NVIDIA’s earnings report despite showed better than expected figures, yet failed to convince the markets. It seems that market participants continue to worry about the role of AI in the economy as well as the level of investments of the US tech sector in AI. Also we highlight Netflix’s relief rally, before correcting a bit lower later on, as the company exited a possible deal for the take over of Warner Bros, thus leaving Paramount Skydance as the only bidder.
Xlence Research Team opinion
We tend to view the risk-off market sentiment as a factor not allowing US stock markets rising, if not even weighing. Should we see the market’s worries intensifying, given the wider uncertainty in the fundamentals surrounding them, we may see US equities retreating further.
Oil prices rally on market worries for Iran
Oil prices rallied in today’s European session as market worries for a possible US military operation in Iran. The US-Iranian indirect negotiations in Geneva, seem to have produced little progress. The negotiations are to continue in Vienna next week, yet the overall situation seems to be testing US President Trump’s patience. Market worries are focusing on a possible US military strike in Iran, possibly of a limited effect, to pressure Iran into accepting US terms for a possible deal.
Xlence Research Team opinion
We are still worried for a possible US military strike in Iran over the weekend and such a scenario could lift oil prices even higher. On the flip side should we see statements from the US side easing market worries for military action we may see oil prices falling.
Bitcoin drifts lower
Bitcoin seems to have stabilised yesterday yet is edging lower in today’s Asian and European sessions. Overall the market uncertainty tends to weigh on the cryptocurrency given its riskier nature. Also today’s losses seem to render the fundamental issues providing support on Wednesday as of lesser importance.
Xlence Research Team opinion
Should we see market worries intensifying and a more risk averse market attitude emerging today or over the weekend we may see Bitcoin’s price dropping even lower.
Disclaimer: This information is not considered investment advice or an investment recommendation, but instead a marketing communication.
