Daily Market Outlook, February 2, 2023 A FED Plateau, Markets Pivot To ECB & BoEUS equity and treasury markets surged, as the FOMC delivered an expected 25bps rate move, the smallest increase since last March, while The Fed Chair maintained the stance that further hikes were likely, markets sensed that there is an impending plateau in Fed policy as the Fed Chair acknowledged that the disinflationary process had commenced, the read from investors was that Fed hawkishness is starting to shift. Asian equities initially cheered the handover from Wall Street; the enthusiasm has waned somewhat as the session has progressed with Nikkei, Shanghai COmp and Hang Seng flatlining as European markets open. European investors will be firmly focused on the two major central bank decisions today from the Bank of England and the European Central Bank. In the UK markets are less decisive on the potential rate move from the BoE, while market pricing assigns a higher probability to a 50bps point move today, some MPC members have been vocal regarding their hesitancy around further meaningful rate rises, on the whole the committee appears to deem inflationary pressures as remaining too elevated to pause the current rate cycle. The key takeaway from today's meeting will be whether the Committee and specifically Governor Bailey remain anchored to the 4.5% terminal rate. The ECB are set to move by another 50bps, with markets fully pricing this move given the clear signals from ECB officials. While ECB Chief Lagarde has acknowledged nascent signs of economic improvement in the Eurozone, with the economy narrowly avoiding contraction in Q4 ‘22, Lagarde remains firmly focused on inflationary pressures which are believed to be trending higher at the core level. With today’s 50bps move considered a lock, markets will move to assess the potential for another 50bps move in March, Madame Lagarde’s press conference and response to questions will be parsed for signs that her hawkish stance remains robust. In the US, investors will eye weekly jobless claims and durable goods data, jobless claims are expected to nudge higher from last week, confirming continued tightness in the employment market stateside.Markets-wise, investors are poised to digest a major round of earnings releases, last night Meta reported earnings, with Meta shares soaring in the post market up as much as 20%, while revenues and EPS were broadly inline, the rally was sparked by the announcement of a $40bln share buyback, investors will now look to Apple, Google parent Alphabet and Amazon who all announce after the close of New York trading tonight. Overnight News of NoteStocks And Futures Extend Fed Fuelled Rise Through Asia SessionFed Slows Its Tightening With Quarter-Point Interest Rate RiseFed Traders See Pivot From Rate Hikes To Rate Cuts In Second HalfMcCarthy Sees Opportunity For Deal On Debt After Biden MeetingECB Set To Hike Rates A Half-Point As Focus Turns To March MeetingBoE Set To Lift Rates To 14-Year High, Might Hint At Next MovesBoJ Deputy Wakatabe Indicates No Policy Change Next MonthHong Kong Central Bank Raises Interest Rate 25Bps After Fed HikeBrazil’s Central Bank Leaves Key Lending Rate Unchanged At 13.75%Bitcoin Jumps To Highest Since August In Post-Fed Crypto RallyOil Prices Rise After US Fed Hikes Rates, Weakening The DollarGold Scales Late-April Highs After Dovish FedMeta Shares Soar On Resilient Revenue And $40Bln In Buybacks(Sourced from Bloomberg, Reuters and other reliable financial news outlets)Options Expiration For the New York Cut 10am EST(BOLD expiries with a value of a Billion+ more magnetic if price is within the daily trading range – source DTCC)EUR/USD: 1.0910 (458M). USD/CHF: 0.9100 (250M)USD/JPY: 129.20 (200M). USD/CAD: 1.3400 (240M)AUD/USD: 0.7140 (302M) 0.7185 (918M)EUR/AUD: 1.5600 (589M). EUR/GBP: 0.8650 (401M), 0.8700 (298M)CFTC Data As of 27/01 ( Source Reuters)USD net spec short in the Jan 18-24 period; $IDX -0.46%EUR$ +0.86% in period, specs buy 7,365 contract long now +134,349$JPY +1.56% in period yen short cut by 1,326 contracts now -21,635GBP$ +0.44$ in period, short reduced by 763 contracts to -23,934CAD specs -3,453 contracts now -30,712; AUD specs +449 contract now -33,171BTC +7.45%, spec short increased by 810 contracts now -1,437Next week's data likely mooted by Fed, ECB, BoE meets Feb 1-2 after period closesTechnical & Trade ViewsSP500 Bias: Intraday Bullish Above Bearish Below 4090 – 4138 Target Hit, New Pattern DevelopingPrimary support is 3990Primary objective is 4384Below 3980 opens 3910/0020 Day VWAP bullish, 5 Day VWAP bullishEURUSD Bias: Intraday Bullish Above Bearish below 1.0930 – 1.10 Target Hit, New Pattern DevelopingPrimary support is 1.0750Primary objective is 1.11Below 1.0730 opens 1.061020 Day VWAP bullish, 5 Day VWAP bullishGBPUSD Bias: Intraday Bullish Above Bearish below 1.2330Primary support is 1.2200Primary objective 1.2460Below 1.2150 opens 1.210020 Day VWAP bullish, 5 Day VWAP bullishUSDJPY Bias: Intraday Bullish above Bearish Below 131.50Primary resistance is 132.30Primary objective is 125.00Above 133.00 opens 135.0020 Day VWAP bearish, 5 Day VWAP bullishAUDUSD Bias: Intraday Bullish Above Bearish below .7050Primary support is .6940Primary objective is .7250Below .6930 opens .687020 Day VWAP bullish, 5 Day bullish VWAPBTCUSD Intraday Bias: Bullish Above Bearish below 23000Primary support 21500Primary objective is 25000Below 21000 opens 2030020 Day VWAP bullish, 5 Day VWAP bullish
