Stocks claw back lost ground despite ADP miss

Chris Beauchamp IG

US stocks have rebounded despite a weak private payrolls report, while utility stocks around the globe remain in demand thanks to the likelihood of imminent rate cuts, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

September slump paused for a second day

What seemed to be the beginning of a fresh slump for global markets has been put on pause, at least for now. US markets have moved higher again this afternoon, having held the lows of the past 48 hours, while the Vix has slumped in afternoon trading. The bulls aren’t giving up just yet it seems. While the ADP report was worse than expected, investors seem to have learnt their lesson this time, avoiding putting too much store in today’s numbers ahead of tomorrow’s payrolls.

FTSE 100 boosted by utilities

The prospect of more rate cuts continues to put new life into the utility sector. Today’s UK leaderboard is populated by a number of the high dividend-paying names, as investors look to bolster their income streams. It’s a helpful recession defence too, given the strong visibility of revenues in the sector.

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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.

Week ahead: US NFP and CPI data to shake Fed cut bets, Japan election looms

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.