Daily Market Bulletin – 28 January 2022

Market Developments

Investors appeared cautious, as an eventful and volatile week draws to a close. Aggressive tightening expectations from the Fed and geopolitical tensions persist, although sentiment shows some signs of improvement, probably helped by solid Apple earnings.

The US Ambassador to the United Nations called for a UN Security Council meeting on Monday, to discuss "Russia's threatening behavior against Ukraine and the build-up of Russian troops on Ukraine's borders and in Belarus". [1]

After US stock markets closed, Apple's Revenue jumped 11% y/y, to a record $123.9 billion, in the quarter ended December 25, 2021 (Q1 FY2022) [2]. The stock strengthened after-hours.

Yesterday, luxury goods group LVMH, posted Revenues of €64.2 billion for 2021, up 44% compared to the previous year. The Fashion & Leather Goods segment was the largest contributor and registered the biggest y/y rise, with "exceptional performances from Louis Vuitton, Christian Dior, Fendi, Celine and Loewe" [3].

The International Monetary Fund (IMF) said on Wednesday that the accommodative monetary policy stance form Bank of Japan is appropriate, given that inflation is projected to remain below the 2 percent target in the medium term. The IMF expects Japan's Growth to accelerate to 3.3 percent in 2022. [4]

Main Asia-Pacific stock markets were upbeat and European futures seem to be in good mood.

The US Dollar is mixed and the JPY Basket is soft, while Antipodeans (AUD, NZD) are tepid against the greenback.

Instruments Snapshot

EUR/USD consolidates and tries to avoid fresh 2022 lows (1.1137)

GBP/USD rebounds and probes 1.3400, after yesterday's 2022 lows (1.3357).

USD/JPY trades with positive undertone, but still can't leave 115.50 behind it.

USD/CAD is soft, capped by 1.2750.

AUD/USD is tepid and could not avoid new 2022 lows (0.7021).

NZD/USD is soft above 0.6550 and in risk of new nearly two year lows.

GER30 is mixed, with 15,500 limiting the upside.

US30 is on the back foot, testing 34,300.

USOIL is cautious, following Thursday's multi-year high (88.56).

XAU/USD is tepid, trying to hold 1,795.

Economic Calendar Picks (GMT)

The United States remain in the spotlight, for December's Personal Consumption Expenditures (13:30), the Fed's preferred measure of inflation. Core PCE had surged 4.7% year-over-year in November.

Earlier, we expect Germany's Q4 Gross Domestic Product (09:00) and Eurozone's Confidence & Sentiment Indicators (10:00).

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 28 Jan 2022 https://usun.usmission.gov/statement-by-ambassador-linda-thomas-greenfield-on-the-un-security-council-meeting-on-the-situation-on-ukraines-borders/

2

Retrieved 28 Jan 2022 https://www.apple.com/newsroom/2022/01/apple-reports-first-quarter-results/

3

Retrieved 28 Jan 2022 https://www.lvmh.com/news-documents/press-releases/new-records-for-lvmh-in-2021/

4

Retrieved 26 May 2022 https://www.imf.org/en/News/Articles/2022/01/27/mcs012722-japan-staff-concluding-statement-of-the-2022-article-iv-mission

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