Daily Market Bulletin – 1 February 2022

Market Developments

Investors appeared cautious as they digest political turmoil in the UK, persistent US-Russia tensions over Ukraine and RBA's monetary policy decision.

The Reserve Bank of Australia announced the end of its asset purchases program today, but kept interest rates unchanged and pushed back against rate hikes.

Australian Retail Sales dropped 4.4% in December, from prior month's impressive +7.3% print.

In the UK, Civil Servant Sue Gray published initial findings of its long awaited report on Downing Street lockdown parties on Monday. 16 gatherings were looked into, 12 of which are also subject to criminal investigation by the Metropolitan Police, which is still ongoing.

The report found "failures of leadership and judgment by different parts of No 10 and the Cabinet Office" It also noted that "Some of the events should not have been allowed to take place. Other events should not have been allowed to develop as they did." [1]

PM Boris Johnson apologized in Parliament [2], but did not seem to acknowledge any wrongdoing. Mr Johnson has been under pressure to resign and drew criticism in Parliament, not only from the opposition, but also from members of his own party, such as former PM Ms Theresa May.

The situation in Ukraine remains tense and Russian and US Ambassadors sparred over the issue, in the UN Security Council meeting yesterday. US President Biden said that "If instead Russia chooses to walk away from diplomacy and attack Ukraine, Russia will bear the responsibility, and it will face swift and severe consequences." [3]

Main Asia-Pacific stock markets were upbeat, with mainland China and Honk Kong out on holiday, while European futures appear somewhat mixed.

In the FX space, we see indecision, with the US Dollar being inconclusive and the JPY Basket giving up earlier gains.

Instruments Snapshot

EUR/USD trades with caution above 1.1300, following Monday's rally.

GBP/USD lacks firm direction, as it still can't leave 1.3450 behind it.

USD/JPY stays on the back foot, testing 115.00.

USD/CAD drops below 1.2700.

AUD/USD is mixed above 0.7050, as it covers initial RBA-led drop.

NZD/USD remains in upbeat mood, looking towards 0.6600.

GER30 is subdued above 15,000.

US30 trades with caution above 35,000, after its solid start to the week.

USOIL trades with positive undertone, trying for fresh multi-year highs (88.85).

XAU/USD extends this week's gains, pushing for the 1,805 handle.

Economic Calendar Picks (GMT)

Its PMIs day today, with readings from Germany (08:55), Eurozone (09:00), UK (09:30), Canada (14:30) and USA (14:45 & 15:00).

Other than that, we expect Canada's November GDP (13:30), US JOLTS Jobs Openings (15:00) and Employment figures from Germany (08:55), Eurozone (10:00) and New Zealand (21:45).

At the beginning of Tuesday, market participants will turn to RBA governor Lowe speech, for more commentary, following today's policy decision.

This is a busy day for earnings, with Alphabet (Google), PayPal, Starbucks and AMD, being some of the companies that stand out after US markets close.

See the economic calendar here.

Nikos Tzabouras

Senior Market Specialist

Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.

With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.

References

1

Retrieved 01 Feb 2022 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1051374/Investigation_into_alleged_gatherings_on_government_premises_during_Covid_restrictions_-_Update.pdf

2

Retrieved 01 Feb 2022 https://www.gov.uk/government/speeches/pm-statement-on-the-sue-gray-report-31-january-2022

3

Retrieved 01 Jul 2022 https://www.whitehouse.gov/briefing-room/statements-releases/2022/01/31/statement-from-president-biden-on-united-nations-security-council-meeting/

Disclosure

Any opinions, news, research, analyses, prices, other information, or links to third-party sites contained on this website are provided on an "as-is" basis, as general market commentary and do not constitute investment advice. The market commentary has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is therefore not subject to any prohibition on dealing ahead of dissemination. Although this commentary is not produced by an independent source, FXCM takes all sufficient steps to eliminate or prevent any conflicts of interests arising out of the production and dissemination of this communication. The employees of FXCM commit to acting in the clients' best interests and represent their views without misleading, deceiving, or otherwise impairing the clients' ability to make informed investment decisions. For more information about the FXCM's internal organizational and administrative arrangements for the prevention of conflicts, please refer to the Firms' Managing Conflicts Policy. Please ensure that you read and understand our Full Disclaimer and Liability provision concerning the foregoing Information, which can be accessed here.

Past Performance: Past Performance is not an indicator of future results.

${getInstrumentData.name} / ${getInstrumentData.ticker} /

Exchange: ${getInstrumentData.exchange}

${getInstrumentData.bid} ${getInstrumentData.divCcy} ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%) ${getInstrumentData.priceChange} (${getInstrumentData.percentChange}%)

${getInstrumentData.oneYearLow} 52/wk Range ${getInstrumentData.oneYearHigh}