The news shaping the markets today

Japan’s current account swung to a deficit of ¥370.8 billion in December, following a ¥1,116.5 billion surplus in the year-ago month. The latest reading also missed market expectations of a ¥73.8 billion surplus and exerted pressure on the JPY/USD forex pair.

Hong Kong’s IHS Markit PMI fell to 48.9 in January, from 50.8 in December. This was the first contraction in the private sector since January 2021, which sent the HKD/USD pair lower in forex trading this morning.

Australia’s NAB business confidence index improved to 3 in January, from a 17-month low of -12 in December. This lent support to the AUD/USD forex pair.

UK’s retail sales grew 8.1% year-on-year in January, versus 0.6% growth in December. However, the GBP/USD fell slightly in forex trading this morning.

The Philippines reported an 18.6% surge in manufacturing production in December, following 27.2% growth in the previous month, which sent the PHP/USD forex pair higher.

What’s happening: Gold futures moved higher on Monday, recording their biggest single-day rise in around three weeks.

What happened: Gold rose to a more than one week high in Monday’s session, receiving support from inflation and geopolitical concerns.

Prices for the safe-haven metal have climbed despite upbeat jobs data released last week.

Why it matters: Data released Friday showed the US economy added 467,000 jobs in January, sharply higher than the consensus estimate of 150,000 new jobs, with some analysts projecting job losses for the month amid the spread of Omicron.

There is wide speculation over the strong data lending support to the Fed’s plans of hiking interest rates at a faster pace, with some experts projecting as many as four rate hikes this year.

Gold prices rose despite the US dollar gaining on Monday. A stronger greenback generally makes gold more expensive for overseas buyers, exerting downward pressure on the yellow metal. The US dollar index rose slightly to approximately 95.51.

April gold added $14, or 0.8%, to close at $1,821.80 an ounce on Monday, recording the biggest single-day gain since January 19. Gold also rose to the strongest settlement since January 26.

Prices for the yellow metal had climbed 1.2% last week, representing the biggest gain since a 2.9% surge in the week ending November 12.

In metals futures news, March silver rose 2.7% to settle at $23.076 an ounce, after adding around 0.8% last week. March copper slipped 0.6% to $4.463 a pound. April platinum fell 0.4% to $1,020 an ounce, while March palladium closed at $2,260.10 an ounce, down 1.3% on Monday.

What to watch: Markets will keep an eye on the Federal Reserve’s announcements, as any change in interest rates will give direction to gold’s price movements in the medium term. An interest rate hike by the Fed will lend support to the greenback and exert pressure on the US dollar-priced gold.

Traders also await the release of consumer prices data, due on Thursday. Markets will also monitor the ongoing Russia-Ukraine tensions.

The markets today

European stocks will be in focus today ahead of economic reports from several countries in the common bloc

Context: European stocks settled higher on Monday, with markets continuing to assess central bank decisions.

Details: Monetary policy decisions announced by central banks last week continued to impact overall market sentiment. While the US Fed indicated the possibility of multiple rate hikes, the ECB seemed committed to keeping rates unchanged despite record high inflation in the common bloc. The Bank of England, which had already raised its benchmark rate in December, announced plans of another hike in three months.

Markets also monitored last week’s upbeat jobs report from the US and its possible impact on the Fed’s interest rate decision.

The ongoing earnings season remained in focus, with Sanofi, Vinci and other large companies releasing results on Monday. However, market sentiment was kept in check by Germany reporting an unexpected decline in industrial production, down 0.3% in December, missing the consensus estimate of 0.4% growth. UK’s Halifax house price index rose 9.7% year-over-year in January, slowing slightly from 9.8% in December.

The pan-European Stoxx 600 gained 0.68% to close at 465.28 on Monday, with most sectors settling in the positive zone. Travel and leisure stocks were among the top performers, adding more than 3% in the previous session.

What to watch: Markets await the release of several economic reports from France, Italy, and Spain today.

Other Markets: US indices closed mostly lower on Monday, with the S&P 500 and Nasdaq 100 down by 0.37% and 0.84%, respectively, and the Dow Jones index rising by 1.39 points.

Support & resistances for today

Market snapshot

What else to watch today

France’s balance of trade, current account, exports and imports, Spain’s industrial production, Italy’s retail sales, Central Bank of Brazil’s Copom meeting minutes, Russia’s total vehicle sales, US NFIB small business optimism index, Redbook index, balance of trade, exports, imports, IBD/TIPP economic optimism index, quarterly report on household debt and credit and API crude oil stock change, Canada’s balance of trade, exports and imports, as well as Argentina’s industrial production.