Account

New to ADSS? Open an
account now to get started.

OR

Already have an account?

Add funds to your ADSS account

Account

New to ADSS? Open an
account now to get started.

Add funds to your ADSS account

Trends & Analysis
News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

News

Keep an eye on these key S&P 500 levels

News

US big banks report better-than-expected earnings

News

Crude oil declines on profit taking

Trends & Analysis
News

GBP/USD recovers following wage report

News

Buy the JPMorgan dip?

News

Goldman Sachs shares surge after earnings beat

News

Keep an eye on these key S&P 500 levels

News

US big banks report better-than-expected earnings

News

Crude oil declines on profit taking

News

GBP/USD gains as investors monitor rate outlook

 

Tuesday, January 23, 2024

Today’s headlines

What’s happening: The British pound moved higher versus the US dollar on Monday, as investors assessed the Bank of England’s monetary policy.

What happened: The sentiment remained upbeat for the sterling during Monday’s session, despite economic growth concerns in the UK.

The Bank of England has been struggling to reach a decision on interest rates following last week’s mixed economic reports.

Why it matters: Data released last week showed the annual rate of consumer price inflation (CPI) in the UK rising 4% year-over-year in December, accelerating for the first time in 10 months. Markets were expecting a decline in the annual CPI to 3.8%.

Retail sales contracted by 3.2% last month, recording the biggest decline since January 2021, while wages in the UK increased at their slowest pace in around one year.

While there are speculations of a rate cut by the Bank of England in May, markets are fully pricing in the first 25 basis points (bps) rate cut by June and a total of about 105 bps of easing in 2024.

Meanwhile, traders shifted their speculations of the US Federal Reserve announcing its first rate cut in May, compared to earlier expectations of March. Markets are pricing in a total of around 135 bps of easing this year.

The US dollar steadied on Monday, which also lent some support to the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, traded almost flat at 103.33.

The GBP/USD forex pair gained around 0.1% to 1.2711 on Monday. The sterling gained around 0.2% to 85.63 pence versus the euro, surging to its highest level since December 11.

London’s FTSE 100 rose 0.35% to close at 7,487.71, while the FTSE 250 jumped 1.08% to settle at 19,075.64 on Monday.

What to watch: Investors await the release of economic reports on manufacturing PMI, services PMI and composite PMI from the UK on Wednesday. Analysts expect the S&P Global UK manufacturing PMI to increase to 47 in January, from 46.2 in December, while services PMI is projected to decline to 53.2 in January, from 53.4 in December. Analysts expect the S&P Global UK composite PMI to increase to 52.2 in January, from 52.1 in December.

Economic data on public sector net borrowing from the UK, scheduled for release today, will also remain in focus.

The markets today

European stocks will be in focus today ahead of consumer confidence data

Context: Equity markets in Europe closed higher on Monday, amid a surge in technology stocks.

Details: European markets started the week on a positive note on Monday, ahead of the key consumer confidence report and the European Central Bank’s monetary policy meeting.

Traders widely expect the ECB to keep interest rates unchanged at its next meeting, scheduled for Thursday.

The STOXX Europe 600 Index jumped 0.77% to close at 472.86 on Monday. While European stocks were already on an uptrend, they received a further boost from the positive opening of US stock markets, which sent the Dow Jones index and S&P 500 to record highs during the session.

Technology stocks surged around 2.1%, while banks and retail shares added approximately 1.2% each on Monday.

Germany’s DAX 40 gained 0.77% to close at 16,683.36, while France’s CAC 40 added 0.56% to settle at 7,413.25 on Monday.

What to watch: Investors await the release of economic data on consumer confidence from the Eurozone today. The Eurozone’s consumer confidence indicator had risen by 1.9 points to -15 in December, reaching the strongest level since February 2022. The indicator is expected to improve further to a reading of -14.3 in January.

Data on manufacturing PMI, services PMI and composite PMI, due to be released on Wednesday, will also remain in focus.

Other Markets: US trading indices closed higher on Monday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.36%, 0.22% and 0.1%, respectively.

The news shaping the markets

Poland’s Prime Minister Donald Tusk pledged to continue providing support to Ukraine against its ongoing battle with Russia. The news sent the RUB/USD pair lower in forex trading this morning.


Australia’s NAB business confidence index rose to -1 in December, from a reading of -8 a month ago, lending support to the AUD/USD forex pair.


The Bank of Japan maintained its key short-term interest rate at -0.1%, which sent the JPY/USD pair slightly lower in forex trading this morning.


New Zealand’s BusinessNZ Performance of Services Index fell to 48.8 in December, from a reading of 51.1 in the prior month. However, new orders remaining in the expansion zone, which lent support to the NZD/USD forex pair.


Poland’s retail sales contracted by 2.3% year-over-year in December, versus a 0.3% decline a month ago, which sent the PLN/USD pair lower in forex trading this morning.

What else to watch today

South Africa’s composite leading business cycle indicator, Turkey’s consumer confidence index, Canada’s new housing price index, US Redbook index, Richmond Fed manufacturing index and Richmond Fed services index, as well as Argentina’s economic activity estimator.


Site by Pink Green
© ADSS 2024


Investing in CFDs involves a high degree of risk that you will lose your money due to the use of leverage, particularly in fast moving markets, where a relatively small movement in the price can lead to a proportionately larger movement in the value of your investment. This can result in loses that exceed the funds in your account. You should consider whether you understand how CFDs work and you should seek independent advice if necessary.

ADS Securities LLC (“ADSS”) is authorised and regulated by the Securities and Commodities Authority (“SCA”) in the United Arab Emirates as a trading broker for Over the Counter (“OTC”) Derivatives contracts and foreign exchange spot markets. ADSS is a limited liability company incorporated under United Arab Emirates law. The company is registered with the Department of Economic Development of Abu Dhabi (No. 1190047) and has its principal place of business at 8th Floor, CI Tower, Corniche Road, P.O. Box 93894, Abu Dhabi, United Arab Emirates.

The information presented is not directed at residents of any particular country outside the United Arab Emirates and is not intended for distribution to, or use by, any person in any country where the distribution or use is contrary to local law or regulation.

ADSS is an execution only service provider and does not provide advice. ADSS may publish general market commentary from time to time. Where it does, the material published does not constitute advice, or a solicitation, or a recommendation to a transaction in any financial instrument. ADSS accepts no responsibility for any use of the content presented and any consequences of that use. No representation or warranty is given as to the completeness of this information. Anyone acting on the information provided does so at their own risk.