Traders swoon for equities once more

Chris Beauchamp IG

Equities are in high demand this morning, with the FTSE 100 50 points higher despite a slew of big dividends.

- Equity ramp pushes on
- Falling dollar the big story once more
- RELX suffers another bad day

Markets have settled back into their routine of steady gains it seems, as the earthquake moment prompted by the US CPI reading passes. The market has looked at the data, had a think, then another think, and has decided. The decision appears to be to resume selling the dollar, furiously buying up non-US assets wherever they can be found, but also going back into US equities with gusto. Yet again we have been treated to the sight of the euro and sterling rallying along with UK and European stocks, a sign that shows risk appetite is back. The only possible fly in the ointment is that the dollar basket is so far showing distinct reluctance to move below the low near the 88 level it hit at the
end of January. Dollar bulls have this to cling to at least, but rallies here have been there for the selling for a year now, and I’m not sure why this one will be any different. Support levels are there to be broken, after all.

The FTSE 100’s respectable gain this morning comes even with a chunky set of ex-dividends from the likes of Shell and AstraZeneca but also taking a bath today is RELX, which has fallen to the £14 level last seen at the end of January 2017. While there are clear worries about future growth in some divisions, it is also likely that RELX is being dumped along with other high dividend stocks, a notable feature of last night’s US session. The rise in Treasury yields has diminished the star appeal of such firms, although whether the move merits the 20% wipeout in RELX shares is a matter for debate. Ahead of the open, we expect the Dow to start at 25,124, up 230 points from last night’s close.

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.