- After a significant drop on Wednesday, Wall Street futures are trading negative.
- US data leaves stock markets in a bad mood.
- Commodity-linked and emerging market currencies under pressure.
- Metals and oil rebound modestly, look vulnerable.
Wall Street futures point lower after the worst day in a month amid concerns about the health of the economy. Oil and metals are trying to recover. The coup halted the recovery of cryptocurrencies.
Complex economic outlook plays against stock markets
On Wednesday, the data for retail sales and industrial production for December in the United States showed larger-than-expected falls, which triggered pessimism about the economic outlook. This time, bad news was not good for the market.
More US data will be released on Thursday, including the weekly report on jobless claims, home starts and building permits and the Philly Fed. It will also be the day that Treasury Secretary Janet Yellen said the country will reach the legal debt limit. Negotiations between Democrats and Republicans will gain the scene. Public speaking on Thursday will be Susan Collins of the Boston Fed, Leal Brainard, Lieutenant Governor, and John William of the New York Fed.
The bad weather on Wall Street on Wednesday (S&P 500 lost 1.56% and the Dow Jones 1.81%) carried over to the rest of the world on Thursday. In Asia, the Nikkei 225 lost 1.44% and the Hang Seng 0.12%. In Europe, the FTSE 100 loses 0.82% and the DAX 1.27%. In the previous one, Dow Jones futures fall 0.63% and S&P 500 futures fall 0.69%.
In the pre-market, alcohol falls 7% after the results. Philip Morris rises 1.25%. Before the opening they will present results Procter & Gamble and Northern, after closing will Netflix and PPG.
While ahead there will be new railway strikes in the United Kingdomin France Today begins a series of protests against the pension reform.
Jacinda Arden, the Prime Minister of New Zealand, announced that he will resign as of February 7, leaving office even before the general elections. The kiwi is among the worst performing currencies on Thursday. The main index of the New Zealand stock market fell 0.3%, retreating from its highest in nine months.
In Australia The employment report was published showing a drop in jobs of 14,600 against the expectation of an increase of 22,500. The unemployment rate remained at 3.5%. AUD/USD extended the decline and is trading at 0.6880, the lowest in a week.
At the Davos economic forum, the president of the European Central Bank, Christine Lagarde, said on Thursday that inflation is too high and that they will continue to raise rates. She was optimistic about the possibility of a “small contraction” in the Eurozone. Other ECB officials, such as Klass Knot, reiterated that they see more significant hikes. This helped the euro, which fell in recent days due to expectations of a less tough central bank.
The and in continues to print volatility in the currency market. Wednesday the bank of japan it had left monetary policy unchanged, sending the yen down. But then, the coin made up all the lost ground. It got an extra boost from declining equity markets and Treasury yields. USD/JPY managed to hold above this month’s lows and returned above 128.00.
Poor investor climate is weighing on emerging market currencies, which began a rebound from highs in months. The USD/MXN, for example, went from lows since February 2020 to rise to weekly highs.
The demand for safe-haven assets pushed up the sovereign bonds around the world. The 10-year bond yield is rising on Thursday after falling as low as 3.32%, the lowest since September. This drop in yields helped limit the decline in gold. The XAU/USD moved away from highs in months, but found support at $1900. The silver operates sideways at 23.40% after a 2% on Wednesday.
The prices of Petroleum they also suffered. The WTI barrel is trading down 0.80% around $78.80, after falling more than 2.5% in the previous day. The bad mood even reached cryptocurrencies, which had the worst day in weeks. Bitcoin trades at $20,700, pulling back from the peak of $21,646 and ethereum at $1,515 after testing levels above $1,600.
technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
