Stock markets post impressive gains

Chris Beauchamp IG

Stock markets are leaping higher, with the FTSE 100 up 100 points and Wall Street up across the board.

Market rally enters higher gear
2021’s performance receives a boost
FTSE 100 back on course for YTD highs

Last week’s sellers have been rudely pushed out of the way in a mad scramble to get back into equities now that Omicron fears are receding almost as fast as they appeared. Billions have been ‘wiped on’ to share prices since Friday’s lows, December living up to its reputation as one of the strongest months for equities. In retrospect the variant news from just after Thanksgiving was almost ideally-timed to hit a market in need of a pullback, and this movement has thrown up some great buying opportunities in a host of sectors.

Today it is the turn of tech and small caps to lead the way higher, but practically every index is enjoying solid gains, and the warnings signs of last week have now been replaced with ‘all clear’ signals. Risk is back on in a significant way; if markets can keep this up then we could be in for a stellar finish to what has been an already excellent year for equities overall.

In London the FTSE 100 has found itself back on course for the highs of the year, recovering all the gains lost in the post-Thanksgiving Omicron slump. UK investors will be hoping this markets a continuation of the 2021 rally, after a tough summer that saw the index struggle for momentum. Bounces in materials and energy have underpinned the gains, and point towards renewed strength for the ‘global reopening’ trade.

Author

Chris Beauchamp

EUR/USD: US Dollar to remain pressured until uncertainty fog dissipates

Unimpressive European Central Bank left monetary policy unchanged for the fifth consecutive meeting. The United States first-tier employment and inflation data is scheduled for the second week of February. EUR/USD battles to remain afloat above 1.1800, sellers moving to the sidelines.

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: Volatility persists in commodity space

After losing more than 8% to end the previous week, Gold remained under heavy selling pressure on Monday and dropped toward $4,400. Although XAU/USD staged a decisive rebound afterward, it failed to stabilize above $5,000. The US economic calendar will feature Nonfarm Payrolls and Consumer Price Index data for January, which could influence the market pricing of the Federal Reserve’s policy outlook and impact Gold’s performance.

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

US NFP and CPI data awaited after Warsh’s nomination as Fed chief. Yen traders lock gaze on Sunday’s snap election. UK and Eurozone Q4 GDP data also on the agenda. China CPI and PPI could reveal more weakness in domestic demand.

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.