On Monday (January 8), gains in big technology stocks pushed U.S. stocks higher at the beginning of the week, setting up a good start for key inflation data and big bank earnings reports.
The Nasdaq 100 outperformed the broader market, with Nvidia performing well. The stock surged after announcing new products to help the personal computer industry attract consumers with artificial intelligence computers. Boeing's stock price plummeted as authorities temporarily grounded its 737 Max 9 aircraft. U.S. Treasury yields fell along with the dollar.
Stocks fell the most since October amid mixed U.S. economic data, on bets the Federal Reserve was in no hurry to cut interest rates.
Robert Teeter, managing director at Silvercrest Asset Management, said: “The valuation-led year-end rally pulling potential gains from 2024 to 2023 makes forecasting this year tricky, especially as data becomes more complex and futures markets Showing that a rate cut by the Fed has been taken into account."
The situation is further complicated by the inflation expectations released by the New York Fed. The survey showed that expected inflation rates over the next one, three and five years have fallen significantly, something the Fed should take comfort in.
Gold prices fell in midday trading in the United States on Monday, but were significantly higher than the session lows. Earlier on Monday, gold hit a three-week low. A lack of major fresh fundamental news at the start of the trading week has precious metals traders focusing on overseas markets, while crude oil prices, the leader in the raw commodities industry, fell sharply. February gold was last down $10.90 at $2,038.70. March silver was last up $0.065 at $23.385.
In foreign exchange, the pound tried last Friday's high of 1.2770, but failed to break through, but it is still close to that level. USD/CAD rose to 1.3400 in early trade amid lower oil prices, but has since moved steadily lower. USD/CAD fell to 1.3349 as risk appetite improved. The euro rode the wave of dollar weakness to hit 1.0980 in early trading before recovering to 1.0950, up just a few points on the day.
At the same time, Fed Governor Bowman said that if interest rates are maintained at current levels, inflation may fall toward the Fed's 2% target. Bowman and other members of the Federal Open Market Committee (FOMC) voted in December to keep the benchmark policy rate steady in a range of 5.25% to 5.5%. Her previous speeches suggested that inflationary pressures may warrant further rate hikes, and she left that option open in Monday's speech.
Earlier on Monday, Atlanta Fed President Bostic said that inflation has fallen deeper than he expected and is now on the way to reaching the Fed's 2% target, but it is too early to declare victory. Bostic on Monday reiterated his expectation for two rate cuts this year, with the first rate cut expected to come in the third quarter. While Bostic was one of the first policymakers last year to call on the Fed to stop raising interest rates, he has repeatedly called for keeping policy tightening for longer.
This week, traders may get a clearer idea of the Fed's path to cutting interest rates. The U.S. consumer price index for December will be released on Thursday, followed by the producer price index on Friday. The numbers should show whether the Fed's efforts to lower inflation to its 2% target are working.
Focus and weather vane of Tuesday’s trading day:
① 14:45 Switzerland’s seasonally adjusted unemployment rate in December
② 15:00 German industrial output monthly rate after seasonally adjustment in November
③ 15:45 France’s November trade account
④ 18:00 Eurozone unemployment rate in November
⑤ 19:00 US December NFIB Small Business Confidence Index
⑥ 21:30 US trade balance in November
⑦ At 01:00 the next day, EIA released its monthly short-term energy outlook report
⑧ API crude oil inventories in the United States for the week to January 5 at 05:30 the next day
Major currency trend analysis:
Euro: EUR/USD rose, closing at 1.0950, an increase of 0.09%. Technically, the initial resistance for the upward movement of the exchange rate is at 1.0978, the further resistance is at 1.1006, and the key resistance is at 1.1033; the initial support for the downward movement of the exchange rate is at 1.0922, the further support is at 1.0895, and the more critical support is at 1.0867.
GBP: GBP/USD rose, closing at 1.2747, an increase of 0.25%. Technically, the initial resistance for the upward movement of the exchange rate is at 1.2785, the further resistance is at 1.2823, and the key resistance is at 1.2880; the initial support for the downward movement of the exchange rate is at 1.2691, the further support is at 1.2634, and the more critical support is at 1.2597.
Japanese Yen: USD/JPY fell, closing at 144.226, a decrease of 0.26%. Technically, the initial resistance for the upward movement of the exchange rate is at 144.857, the further resistance is at 145.524, and the key resistance is at 146.124; the initial support for the downward movement of the exchange rate is at 143.59, the further support is at 142.99, and the more critical support is at 142.323.
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Indonesia
2024-01-09
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