Daily Market Bulletin – 26 January 2022

Market Developments

Investors were edgy, as they brace for today's Fed policy decision and after a bad day in the US Stock markets.

Microsoft reported solid results for Q2 FY2022, with Revenue growing 20% year-over-year, to $51.7 billion, while forward guidance for the next quarter (Q3 FY2022) seemed to satisfy markets and the stock rose in extended trading.

The Intelligent Cloud segment, which includes Azure, is projected to generate Revenue of $ 18.75 to $19 billion. Total Revenues are forecasted at $48.5 billion to 49.3 billion. [1]

On Tuesday, the International Monetary Fund (IMF) downgraded its global growth forecast to 4.4% in 2022 from 4.9% in the October projections. 2022 GDP was also lowered to 4% for the United States and to 4.8% for China, compared to 4.5% and 5.6% respectively in the October projections. [2], [3].

Main Asia-Pacific stock markets were somewhat mixed, with Australia out on holiday, but European futures appear to be in better mood.

In the FX space, the US Dollar consolidates and the JPY Basked is soft, as sentiment shows signs of improvement.

Instruments Snapshot

EUR/USD is cautious, breaching 1.1300.

GBP/USD consolidates, trying to hold 1.3500.

USD/JPY trades with positive undertone, trying to reclaim 114.00.

USD/CAD retreats and probes 1.2600 ahead of Fed & BoC meetings.

AUD/USD shows indecision around 0.7150.

NZD/USD is soft below 0.6700.

GER30 is upbeat and reclaims 15,200

US30 rebounds and tests 34,300.

USOIL stays on the offensive surpassing 85.50.

XAU/USD is tepid below 1,850, following yesterday's 2022 highs (1,854).

Economic Calendar Picks (GMT)

All eyes will be on the US Federal Reserve monetary policy decision (19:00) and Mr Powell's press conference (19:30), for more clues around lift-off date and tightening path.

Earlier in the day, the Bank of Canada (Boc) hands down its monetary policy decision as well (15:00), while New Zealand Q4 CPI Inflation is due at 21:45.

UK politics are likely to be in the spotlight, as the results of an investigation in Downing Street parties during Covid-19 lockdown, could be released as early as today.

On the earnings front, Boeing and AT&T stand out before US markets open, while Tesla and Intel, report after the 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 26 Jan 2022 https://view.officeapps.live.com/op/view.aspx

2

Retrieved 26 Jan 2022 https://www.imf.org/en/Publications/WEO/Issues/2022/01/25/world-economic-outlook-update-january-2022

3

Retrieved 19 May 2022 https://www.imf.org/en/Publications/WEO/Issues/2021/10/12/world-economic-outlook-october-2021

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