More promising signs of global recovery appear

Chris Beauchamp IG

Stock markets are still quiet ahead of earnings season in the US, but the continued drumbeat of good news has provided a foundation for some small increase in risk appetite.

Small gains appear as investors await earnings season
US CPI rises as petrol demand increases
ASOS bolstered by solid numbers

The quiet, directionless week continues across global markets, as we await the start of US earnings season. Until then investors can watch the sight of a sitting US president underdoing impeachment proceedings for the second time in one term, a quite remarkable achievement and quite the change from the second term that Mr Trump had been expecting to be granted about a year ago. Two encouraging signs for the global economy have been seen, with the first being the ongoing success of Israel’s vaccination programme showing that the Pfizer jab begins to bring down infection rates within days, blazing a trail for others to follow. The second encouraging point has been the rise in US consumer prices, driven by petrol demand, which again points towards a much better second half for the global economy. It will also put more gas in the tank of the oil rally, which has been built on limiting supply and increasing demand and has outshone equities over the past few sessions.

ASOS shares have gained 12% since the start of the year, and with today’s numbers this looks set to increase. After a loss of momentum in October and November the price is back on an upward path, as its prime position in the UK retail space is reinforced by increased volumes of online shopping. This is another trend given a helping hand by the pandemic, and one that is unlikely to reverse. The only question will be whether a post-pandemic cyclical recovery will hit these highly-priced growth stocks, leaving them out of favour compared with other sectors.

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Chris Beauchamp

EUR/USD meets initial support around 1.1800

EUR/USD remains on the back foot, although it has managed to reverse the initial strong pullback toward the 1.1800 region and regain some balance, hovering around the 1.1850 zone as the NA session draws to a close on Tuesday. Moving forward, market participants will now shift their attention to the release of the FOMC Minutes and US hard data on Wednesday.

GBP/USD bounces off lows, retargets 1.3550

After bottoming out just below the 1.3500 yardstick, GBP/USD now gathers some fresh bids and advances to the 1.3530-1.3540 band in the latter part of Tuesday’s session. Cable’s recovery comes as the Greenback surrenders part of its advance, although it keeps the bullish bias well in place for the day.

Gold remains offered below $5,000

Gold stays on the defensive on Tuesday, receding to the sub-$5,000 region per troy ounce on the back of the persistent move higher in the Greenback. The precious metal’s decline is also underpinned by the modest uptick in US Treasury yields across the spectrum.

Ethereum Price Forecast: BitMine extends ETH buying streak, says long-term outlook remains positive

Ethereum (ETH) treasury firm BitMine Immersion continued its weekly purchase of the top altcoin last week after acquiring 45,759 ETH.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Ripple slides to $1.45 as downside risks surge

Ripple edges lower at the time of writing on Tuesday, from the daily open of $1.48, as headwinds persist across the crypto market. A short-term support is emerging at $1.45, but a buildup of bearish positions could further weaken the derivatives market and prolong the correction.