US-UK deal helps to support risk appetite

Chris Beauchamp IG

Stocks steady despite gloomier outlook

Over the past 24 hours both the Fed and the BoE have warned that the outlook for their respective economies is worsening, though the former seems in no hurry to cut rates while the latter’s divided policy committee indicates that rate cuts may continue at a slower than expected pace. Despite this, stock markets around the globe continue to edge higher, though in a far more measured pace than was the case in April. Risk appetite remains fragile, since investors remain on watch for signs that a recession is beginning to appear in the data.

FTSE 100 unimpressed by UK-US deal but mid-cap index rises

The past two weeks have seen the UK mid-cap 250 index overtake the FTSE 100 in their rebounds from the April low. Worries about some of the latter’s heavyweight dividend payers have hobbled the FTSE 100, but at least UK-focused firms can breathe easier now that the US and UK have signed a framework trade deal.

Author

Chris Beauchamp

EUR/USD holds firm above 1.1900 as US NFP looms

EUR/USD holds its upbeat momentum above 1.1900 in the European trading hours on Wednesday, helped by a broadly weaker US Dollar. Markets could turn cautious later in the day as the delayed US employment report for January will takes center stage.

GBP/USD remains above nine-day EMA near 1.3650

GBP/USD recovers its recent losses from the previous session, trading around 1.3680 during the European hours on Wednesday. The technical analysis of the daily chart indicates a sustained bullish bias, as the pair trades within an ascending channel pattern.

Gold sticks to gains near $5,050 as focus shifts to US NFP

Gold holds moderate gains near the $5,050 level in the European session on Wednesday, reversing a part of the previous day's modest losses amid dovish US Federal Reserve-inspired US Dollar weakness. This, in turn, is seen as a key factor acting as a tailwind for the non-yielding yellow metal ahead of the critical US NFP release.

US Nonfarm Payrolls expected to show modest job gains in January

The United States Bureau of Labor Statistics will release the delayed Nonfarm Payrolls data for January on Wednesday at 13:30 GMT. Investors expect NFP to rise by 70K following the 50K increase recorded in December.

S&P 500 at 7,000 is a valuation test, not a liquidity problem

The rebound from last week’s drawdown never quite shook the sense that it was being supported by borrowed conviction. The S&P 500 once again tested near the 7,000 level (6,986 as the high watermark) and failed, despite a macro backdrop that would normally be interpreted as supportive of risk.

Bitcoin price slips below $67,000 ahead of US Nonfarm Payrolls data

Bitcoin price extends losses, and trades below the lower consolidating boundary at $67,300 at the time of writing. A firm close below this level could trigger a deeper correction for BTC. Despite the weakness in price action, institutional demand shows signs of support, recording mild inflows in ETFs so far this week.