Equities build up positive momentum

Chris Beauchamp IG

Stock markets have made some gains, with the FTSE 100 20 points higher as the close looms.

Absence of weekend crises helps stocks
More weaker US data supports dovish argument
Sterling still falling as Boris holds his lead

In such a busy week for central banks, today may be as good as it gets for equities. But the lack of major disruption over the weekend has helped risk appetite. Key flashpoints in the shape of the Hong Kong protests and the attack on tankers in the Middle East failed to develop, and the Deutsche Bank plan to create a bad bank (some might wonder what would be left of DB) has helped finance stocks to post some gains. Today’s weaker Empire State index has bolstered the case for a softer Fed outlook on Wednesday, although it will be something of a shock if the central bank does move this week; a general acknowledgement of the need to err on the side of caution is probably all investors will
get. Those hoping for a rate cut will have to wait until later in the year, when recent weakness in some data may have morphed into something more concrete.

Earlier strength in sterling is slipping away as further leadership polls point towards Boris reaching Number 10 in a short space of time. At this point, it is more of question of whether there will be anyone left to oppose the Blonde Bombshell – last night’s debate revealed the weaknesses of the other candidates, especially when compared to Twitter favourite Rory Stewart. Not appearing may prove to be a masterstroke by Boris – allow support to head towards the media darling, while knowing that, in a crunch, the membership itself will plump for the favourite.

Author

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.