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Trading Leveraged Products is risky

Treasury and Wall Street soared on the heels of the NFP data where the net effect is a tempering in Fed rate hike expectations. The markets are cheering the cooling in wage growth and a softer but still resilient labor market. The erosion in the service sector is a bit ominous but adds to the belief that the FOMC will soften its stance with a 25-50 bp hike on February 1 following the 50 bp tightening in December.

The jump in the workforce and easing wage growth & further signs of an economy slowing down with services contracting for the first time in more than 2-1/2 years in December = US economy recession, & Fed on its hiking path but no need to do too much!

  • The USD Index falls 9% from peaks. It drifted to 103.23 from 105.40 on Friday after the NFP. Fed funds futures are suggesting a 4.958% terminal rate in June.
  • China’s re-opening of its borders – could add further pressure on USD.
  • EUR – spiked to nearly 1.0700.
  • JPY – slightly higher today at 132.16 from 131.20 bottom.
  • GBP – gaining 0.42% to 1.2166, after spiking 1.5% on Friday.
  • Stocks – The US markets surged. US500 +2.28% and USA100 +2.56%. APPL +3.68%, AMZN +3.56%, MSFT +1.18%.  
  • Treasury yields dove, led by the short end as the market priced out the more hawkish Fed bets. The 2-year rate plunged 20 bps to a low of 4.243%.
  • USOil – rose after Chinese announcement. Today trades at $75.30.
  • Gold – reversed 60% from 2022 downleg. Breached $1880.
  • BTC – rise to 17166.23.

Today Fed’s Bostic and BOE’s Pill speak, Japan’s PM Kishida meets with France’s President Macron, Eurozone unemployment. Earnings season kicks off this week with the major US banks.

Biggest FX Mover @ (07:30 GMT) AUDUSD (+0.78%). Trade-and-China sensitive AUD up to 0.6945 today.  MAs flattened but MACD histogram & signal line remain positive and rising. RSI 67 but turns slightly lower, H1 ATR 0.00166, Daily ATR 0.0096.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.






Previous articleEURUSD: Weekly Review 09-13 January

Having completed her five-year-long studies in the UK, Andria Pichidi has been awarded a BSc in Mathematics and Physics from the University of Bath and a MSc degree in Mathematics, while she holds a postgraduate diploma (PGdip) in Actuarial Science from the University of Leicester.


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