European stocks advanced on Thursday rebounding from the Wednesday losses thanks to ECB head Mario Draghi’s dovish comments. Yesterday the ECB meeting took place which resulted in no change in the interest rates. However, Draghi gave hints on further economic stimulus possible on the next ECB meeting in March given the turmoil in financial markets and Chinese slowdown. His speech supported the investors’ confidence and made the euro weaker. EURUSD currency pair lost 0.4% and is currently traded at 1.0838. The FTSEurofirst index added 1.3% yesterday having lost 3.3% in the previous session and hitting on Wednesday a fresh low since October 2014. FTSE 100 index edged up 1.81%, Dax 30 index added 2.1%. Stocks of the UK’s Pearson sky-rocketed 15% on the news it planned to cut 10% of its staff and restructure. On the other hand, Deutsche Bank stocks dropped 5.2% on the news the bank expected a net loss of almost 7 bn. euros. Today in the morning the preliminary January PMIs (composite, services and manufacturing) were released in Germany, France and Eurozone by Markit, they all fell even more than expected. No more important data are expected today in EU.
Asian stocks advanced today on dovish ECB comments and oil rebound from its 12-year lows. Previously the Asian markets were at 4-year lows. Nikkei index jumped 5.9% today from the Thursday’s 15-month lows supported by the belief the bank of Japan will further stimulate national economic growth. The decision is to be taken on the following Bank’s meeting on January 28-29. The USDJPY exchange rate rose 0.3% to 118.03 yen, up from this week’s one-year bottom at 115.97. The Chinese yuan is steady against the dollar and is traded at 6.5794.
Brent crude edged up 5% to $30.75 a barrel today while WTI added almost 4% to $30.75 a barrel. The recovery of the commodity market was driven by the lower-than-expected growth in oil stockpiles in some US states and the spell of cold weather that pushed the demand up. Previously this week both Brent crude and WTI hit fresh 12-year lows below $28 a barrel after the international sanctions imposed on Iran amid its nuclear program were lifted raising concerns of Iranian oil inflow to the global commodities markets.
Gold prices looked down on Friday as prospect of additional monetary stimulus by ECB dragged euro down and pushed the European stocks up which limited demand for gold. Spot gold fell 0.5% to $1,096 an ounce while the February gold futures fell to $1,097.60.
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
Recommended Content
Editors’ Picks
EUR/USD stays near 1.0800 after upbeat US data
EUR/USD stays under modest bearish pressure and trades near 1.0800 in the American session on Thursday. The data from the US showed that the real GDP growth for the fourth quarter got revised higher to 3.4% from 3.2%, supporting the USD and weighing on the pair.
GBP/USD stays in daily range above 1.2600
GBP/USD fluctuates in a narrow channel above 1.2600 on Thursday. The better-than-expected Initial Jobless Claims data from the US and the upward revision to the Q4 GDP growth helps the USD stay resilient against its rivals and limits the pair's upside.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays above 4.2% after upbeat US data and makes it difficult for XAU/USD to preserve its bullish momentum.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.