Thread: ForexMart's Forex News

January 30. The main economic events of the day: January 30, 2023

At the end of last week, the dollar managed to finish trading in positive territory, and its DXY index showed a modest increase of about 20 points. Last week, which was the last full trading week of the month, turned out to be extremely volatile and saturated with the publication of important macro statistics.

The current week promises to be no less interesting: meetings of the three largest world central banks (Fed, Bank of England, ECB) are expected at once, at which decisions on rates will be made. Market participants expect an interest rate increase of 0.50% from the ECB and the Bank of England, but only 0.25% from the Fed.

The week will end with the publication of key data from the US labor market: the US Department of Labor will present a monthly Non-Farm Payrolls report with data for January.

The main and only event of Monday, January 30, will be the publication of preliminary data on German GDP for the 4th quarter. Since the German economy is the locomotive of the entire European economy, a high value of the GDP indicator is considered a positive factor for EUR, and a low one is considered a negative factor.

Analysts predict that German GDP growth in the 4th quarter of 2022 amounted to 0%, and in annual terms – 0.8%. The previous values were marked at the levels of 0.4% and 1.2%, respectively. The data is better than the forecast may strengthen the euro in the short term.

February 1. Experts predict an increase in ECB rates by 50 bps

Tomorrow, February 2, the first meeting of the European Central Bank in 2023 on the rate will be held. Market participants are confident that the ECB will raise key interest rates by 50 basis points, to the highest since 2008.

If the market forecasts come true, the base interest rate on loans will be raised to 3%, the deposit rate to 2.5%, and the rate on margin loans to 3.25%. At the previous meeting, the ECB increased all three rates by 50 bps. In total, they were raised by 250 bps in 2022.

Following the results of the December meeting, the head of the central bank, Christine Lagarde, said that the regulator intends to continue raising rates at a rate of 50 bps, and already in January, some representatives of the Central Bank confirmed the relevance of these plans. Now the main question for investors is whether the ECB will continue to increase rates by 50 bps in March, or will consider it necessary to slow down the pace of their increase.

It is worth noting that the European regulator usually makes a decision on rates not in advance, but directly at each meeting, taking into account the emerging data.

Today, data on inflation in the eurozone were published, according to which the growth rate of consumer prices in January slowed significantly – to 8.5% in annual terms (from 9.2% in December). This indicator has become the lowest since May last year, but it still significantly exceeds the ECB's 2% target.

February 6. Oil has stabilized after a sharp drop last week

At the end of last week, oil prices showed a sharp drop from the level of $84 per barrel to $79.70. On Monday, Brent managed to stabilize, settling within the narrow sideways range of $80.00-$80.30 per barrel.

North American WTI oil shows similar dynamics: the current quote of the asset is $73.60 per barrel. Last Friday, WTI was trading at $77.75. At the end of last week, Brent fell by 7.5%, WTI – by 7.9%.

Pressure on the market was exerted by the weakening of investor optimism about the growth rate of demand in China after the lifting of anti-bullying restrictions, as well as strong data on the labor market of the United States. According to the report of the US Department of Labor, the number of people employed in the non-agricultural sector increased by 517 thousand, which is significantly higher than the forecast of 187 thousand and December growth of 260 thousand.

At the same time, the unemployment rate fell to the lowest since 1969 (3.4%). Data from the US Ministry of Labor showed that the Federal Reserve System still has room for maneuver in terms of tightening monetary policy.

Additional pressure on oil quotes was exerted by the statement of the head of the International Energy Agency that the economic recovery in China after the rejection of strict quarantine measures may be more powerful than expected. According to the IEA forecast, the Chinese economy will account for about half of the growth in oil demand this year.

It is also worth recalling that on February 5, the decision of the European Union and the G7 to impose an embargo on the import of petroleum products from Russia came into force. Market participants are closely monitoring the consequences of these measures.

February 8. The oil market is on the rise in the middle of the week

Oil quotes accelerated growth on Wednesday amid hopes for a recovery in demand in China and fears of supply disruptions due to earthquakes in Turkey.

In addition, risky assets, including oil, were supported by statements made yesterday by the head of the US Federal Reserve System Jerome Powell, which turned out to be not as «hawkish» as the market expected.

The current price of Brent crude oil is $84.80 per barrel. Yesterday, the asset quotes were located at $81.60 per barrel. North American WTI crude is trading near $78.30 after yesterday's decline to $74.80 per barrel.

Additional support for the oil market is provided by the words of the head of the International Energy Agency, Fatih Birol, that the recovery of China's economy may proceed at a more active pace than expected. And this, in turn, will lead to a global increase in demand for oil and natural gas.

Today, data from the US Department of Energy on crude oil reserves in the country will have an impact on the market. Analysts predict an increase in oil reserves by about 2.5 million barrels. Yesterday's report from the American Petroleum Institute (API) indicated a reduction in reserves in the United States by 2.18 million barrels per week.

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February 15. The Floki token rate jumped by 46% after Elon Musk's tweet

The Floki token (FLOKI) exchange rate increased by 46% after the head of Tesla and SpaceX, Elon Musk, published photos of his Shiba Inu dog named Floki.

On February 15, the billionaire posted a photo of his pet on the social network and called him the new CEO of Twitter, noting that Floki is well versed in numbers. «The new CEO of Twitter is amazing,» the billionaire wrote.

As a result, Floki – the management token in the ecosystem of the same name, which includes the gaming metaverse, the NFT marketplace, the FlokiFi DeFi project and the educational crypto platform – has sharply jumped in price.

Other meme «dog» cryptocurrencies also reacted with a slight increase. Dogecoin has risen in price by 6% over the past day, Shiba Inu – by 4.5%.

Elon Musk announced that he will name his puppy Shiba inu Floki on June 25, 2021. Then the billionaire's tweet caused the Shiba Inu cryptocurrency quotes to rise by 9%. In December of the same year, after the billionaire published a photo of Floki, the value of the Santa Floki token increased by 4000%, but since then it has fallen to zero values.

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March 1. Oil began to decline on signals of rising stocks in the US

On the first day of March, oil quotes began to decline after the release of data from the American Petroleum Institute (API) on another increase in fuel reserves in the United States.

The price of Brent crude oil fell from the level of $84.10 to $82.70 per barrel. North American WTI oil shows similar dynamics: a decline to $76.20 after yesterday's growth to $77.65 per barrel.

According to API statistics, crude oil inventories in the United States increased by 6.2 million barrels last week. Today, we should pay attention to similar data from the US Department of Energy. Analysts assume that the official report will indicate an increase in reserves by about 500 thousand barrels.

Yesterday, oil showed strengthening amid optimism about the recovery of the Chinese economy. In particular, the Purchasing managers' Index (PMI) in the processing industry of China rose in February to 52.6 points (from 50.1 points a month earlier), reaching a record high since 2012. Analysts on average expected a more moderate increase, up to 50.5 points.

The PMI of the service sector in February rose to 56.3 points from 54.4 points in January. The indicator has updated the maximum since March 2021.

February 28. The IMF refused to ban cryptocurrencies

The International Monetary Fund intends to abandon the idea of a complete ban on cryptocurrencies. This was stated by the Managing Director of the IMF Kristalina Georgieva during her speech at the meeting of G20 finance ministers in Bangalore, India.

Instead of a ban, the fund plans to differentiate and regulate crypto assets. «We are in favor of regulating the world of digital money, and this is a top priority, despite the fact that there is still a lot of confusion in the classification of digital money,» Georgieva said.

To date, the IMF's first goal is to distinguish between government-backed digital currencies of central banks and publicly issued crypto assets and stablecoins.

The head of the fund also stated that fully secured stablecoins create a fairly good space for the economy, and unsecured crypto assets are speculative and high-risk assets that require more regulation. The IMF still believes that crypto assets cannot be legal tender, since they are not secured by anything.

Moreover, if states fail to develop a mechanism to combat money laundering through cryptocurrencies and protect investors, the IMF does not rule out a complete ban on the use of an innovative tool in the global economy.

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March 6. Gold is declining in anticipation of the speech of the Fed’s head

On Monday, gold prices are mostly declining, moving away from the maximum in 2.5 weeks. Pressure on the precious metal is exerted by expectations of the speech of the head of the US Federal Reserve System Jerome Powell, which will take place later this week. Market participants hope to clarify the prospects of the central bank's monetary policy.

The current quote of gold paired with the dollar is $1856.45. During the day, the asset fell from the level of $1863 to $1854 per troy ounce. At the same time, the dollar index increased by 0.1%, making dollar-denominated gold more expensive for holders of other currencies.

In addition to Powell's speech, investors are waiting for Friday's data on the US labor market. At the end of the week, the monthly Non-Farm Payrolls report on the number of new jobs in the non-agricultural sector will be published. A weaker than expected indicator will indicate that the US Federal Reserve rate will not rise too rapidly, and this will support gold.

Spot silver prices declined to the level of $21.17, recovering during the day to the current level of $21.23 per ounce. Platinum fell by 1% to $968.09, and palladium fell in price by 1.8% to $1,426 per ounce.