BP and Shell power FTSE 100 higher

Chris Beauchamp IG

The FTSE 100’s 30-point bounce today is at odds with a more-muted session on Wall Street.

European markets have held their ground while Wall Street continues to struggle, picking up a theme from last Friday. No doubt the early signs of pre-FOMC hesitancy detected on Friday will only get stronger now that the decision and press conference are just over 48 hours away. In one sense, barring something radical, the outlook is quite tough either way for US stocks. No change and Wall Street will be left waiting for the next earnings season to start, but if the Fed talks about an earlier tapering then thin summer markets might be ripe for a bigger pullback. The inflation story gets another boost tomorrow with PPI readings, so that might help provide some distraction while investors wait for Jerome Powell, but stock markets overall continue to look in vain for a catalyst to resume their upward move. Early gains today were sold, suggesting that a broad atmosphere of caution continues to hang over equities.

Oil’s resilience in the face of warming US-Iran relations suggests that the supply dynamic continues to play second-fiddle to the expectation that demand will keep building into the second half of the year. Growth forecasts have remained stable, and traffic levels continue their recovery to, or in some cases above, pre-Covid levels. And while inflation concerns bother some, stripping out energy and food in core CPI means that so far the rise does not appear to be perturbing monetary and fiscal policymakers.

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Chris Beauchamp

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.