Headlines:
The New Zealand Dollar drops across the board as RBNZ disappoints the hawksThe risk mood picks up in European morning tradeA major war between US and Iran looks imminent – reportECB president Lagarde reportedly poised to leave the central bank before her term expiresECB’s Villeroy: The ECB has won the battle against inflationHeads up: US Treasury to release TIC data later todayUK January CPI +3.0% vs +3.0% y/y expectedFrance January final CPI +0.3% vs +0.3% y/y prelim
Markets:
US dollar steadier across the boardGBP leads, NZD lags on the dayWTI crude oil up 2.6% to $63.95European indices post solid gains; S&P 500 futures up 0.5%Gold up 1.0% to $4,927, silver up 2.9% to $75.62US 10-year yields up 1.7 bps to 4.07%Bitcoin down 0.1% to $67,550
It was a slower session for the most part as markets are consolidating through the week awaiting further catalysts.
In Europe, the big news is that we could see ECB president Lagarde proceed with an early departure from the central bank. It is being reported that she could be eyeing an exit before the French presidential elections next year.
That didn’t have much of any impact on markets though. The euro is sitting just a touch lower but nothing noteworthy with EUR/USD down just 0.1% to 1.1840. It owes much to the dollar keeping steadier and just slightly firmer, awaiting the FOMC meeting minutes later in the day.
USD/JPY is seen up 0.3% to 153.75 while USD/CAD is flat at 1.3638 currently. The NZD is the laggard after the RBNZ decision earlier today, with NZD/USD marked down by 0.6% to 0.6009 at the moment.
The most notable move on the session comes from the oil market, with prices spiking after Axios reported that a US-Iran war looks imminent.
WTI crude oil jumped up by 2.6% to around $64 now as geopolitical concerns return. The rebound today also coincides with a solid bounce off the 200-day moving average for oil. So, that’s a technical win for buyers as well.
In other markets, equities are holding steadier after the modest recovery in Wall Street yesterday. US futures are pointing higher, with S&P 500 futures up 0.5%. In Europe, major indices are also closing in on fresh record highs as well with the DAX up by 0.9% and CAC 40 up by 0.6% on the day. UK’s benchmark index is up 1%, hitting fresh highs after the inflation data earlier in the day.
As for precious metals, we are seeing slight gains in gold and silver today. However, they are nothing to shout about as compared to the volatility swings we’ve seen in all the weeks before.
Gold is up 1.0% to $4,927 with silver up 2.9% to $75.62 on the day. The gains here mostly reinforce the consolidative phase in precious metals, but there is some fatigue setting in and that could spell danger down the road. So, just be wary of that.
Coming up in US trading later, there will be the FOMC meeting minutes to go through but don’t forget about the TIC data from the US Treasury as well to end the day.
This article was written by Justin Low at investinglive.com.