Market Movers Update, 7 February 2022
NFP week just passed with a 467K gain in payrolls and investors keeping an eye on the 10-Year yield which is near 2% since last week.
Let’s dive in!
What moved the markets?
Oil. Focus on stock swings last week kind of neglected the big news on US oil prices topping at $90. Many attempts by the current administration to keep them reasonable, yet, the prices are back to their highest levels since seven years.
Stocks & Indices. Both remained relatively volatile last week with only a few stocks holding the major US Indexes at satisfactory levels. We would be expecting even bigger down trends if those that are left in the green start falling behind. European stocks though are pointing higher after a rally in the Asian session. Quite a few US earning reports are coming through as well, expect high volatility just like last week!
GBP. ECB is expecting an interest-rate increase as early as the fourth quarter with borrowing costs tightening at least for 25 basis-points. U.K. Prime Minister Boris Johnson is making moves once more. Quite a few key posts are being filled with moves attempting to cling to the power before the resignation comes.
The dollar index got some volatility – what’s next?
Just like expected in the previous analysis (here), the dollar showed some willingness to run for liquidity. Not only below the initial consolidation period created during the holidays but above it with very strong and sudden momentum.
Where we are at now? No man’s land again, pretty much the same consolidation range is back in front of us. Yet, in our opinion, the market is set to go downwards towards 94.5 big figure and then probably even 93.00 level.
What does it mean for foreign currency pairs? We would expect a bit of bearishness to get back into the equilibrium of the consolidation first, but then: upside-only!