Stocks have worst January in 6 years

“Those who keep learning will keep rising in life.” - Charlie Munger

 

 

 

HEADLINES

 

 

 

• Dollar slides as recent rally takes a pause, may have seen short-term peak
• Australia, NZ dollars on the ropes as RBA enters the ring
• Oil posts biggest monthly gain in a year on tight supply, political tensions
• Gold faces January fall, palladium set for best month in 14 years
• Global stocks rebound but head for worst January since 2016
• BoE: A rate hike on Thursday and two more in 2022 – Danske Bank

 

 

 

FOREX

 

 

 

Dollar slides as recent rally takes a pause, may have seen short-term peak

 

 

The U.S. dollar fell on Monday, posting its largest daily fall since last November as investors consolidated gains after hitting a 1-1/2-year high on Friday on expectations of a faster pace of rate hikes by the Federal Reserve.

With the Fed clearly signalling last week that it intends to raise interest rates as early as the March 15-16 policy meeting, Wall Street banks are now expecting about five to seven rate hikes this year.

 

 

Australia, NZ dollars on the ropes as RBA enters the ring

 

 

The Australian and New Zealand dollars were pinned near multi-month lows on Monday ahead of a policy meeting by Australia's central bank where it is likely to end quantitative easing but might not sound as hawkish as markets are pricing in.

The Aussie was huddled at $0.7036 , having shed 2.5% last week to the lowest since July 2020 at $0.6967. The kiwi dollar also sank 2.5% last week to last stand at $0.6553 , depths not seen since October 2020.

 

 

 

COMMODITIES

 

 

 

Oil posts biggest monthly gain in a year on tight supply, political tensions

 

 

Oil prices rose on Monday to end January with their biggest monthly gain in a year, boosted by a supply shortage and political tensions in Eastern Europe and the Middle East.

Market analysts and Reuters sources widely expect OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, to keep to its policy of gradual production increases when it meets on Wednesday.

 

 

Gold faces January fall, palladium set for best month in 14 years

 

 

Gold prices edged up on Monday even as expectations for interest rate hikes by the U.S. Federal Reserve put non-yielding bullion on track for its worst monthly performance since September, while palladium braced for its best month in 14 years.

 

 

 

STOCKS

 

 

 

Global stocks rebound but head for worst January since 2016

 

 

World stocks staged a modest rebound on Monday as traders put aside concerns about interest rate rises and the crisis in Ukraine to dip back in, but global equities are still headed for their worst January since 2016 after a bruising month.

Wall Street edged higher on Monday after a rise in European shares helped stabilize investor sentiment after a series of volatile sessions.

 

 

 

ANALYSIS

 

 

 

BoE: A rate hike on Thursday and two more in 2022 – Danske Bank

 

 

“We expect the BoE to announce “passive QT” (ceasing reinvestments of maturing bonds) in connection with the upcoming meeting. The BoE has previously stated QT would start when the Bank Rate reaches 0.50%. We expect “active QT” (selling bonds to markets) when the Bank Rate reaches 1%. Our base case right now is that happens in November, but since we believe risks are skewed towards more rate hikes, risk is also skewed towards an earlier start for “active QT”.”   

“Our base case is three rate hikes in 2022 (February, May and November) but markets are pricing in around 125bp this year, i.e. five rate hikes.

 

 

 

CHART

 

 

 

Euro / British pound – Weekly Candlesticks

Source: GKFX Prime Metatrader 4

EUR/GBP is testing major support at 0.83 with new 5 ½ year lows in play. - Prepared by Trading Writers*

 

 

 

CALENDAR

 

 

 

*Times in GMT

 

 

Source: FX Street Economic Calendar

 

SOURCE

https://www.fxstreet.com/economic-calendar
https://www.fxstreet.com/news/boe-a-rate-hike-on-thursday-and-two-more-in-2022-danske-bank-202201311627
https://www.reuters.com/markets/europe/global-markets-wrapup-1-pix-2022-01-31/
https://www.reuters.com/markets/europe/dollar-near-18-month-high-ahead-bumper-central-bank-week-2022-01-31/
https://www.reuters.com/business/energy/oil-rises-hovers-near-7-year-highs-supply-fears-political-risks-2022-01-31/
https://www.reuters.com/markets/rates-bonds/australia-nz-dollars-ropes-rba-enters-ring-2022-01-31/
https://www.reuters.com/markets/europe/strong-dollar-sets-gold-worst-monthly-decline-since-september-2022-01-31/