GOLD
Gold prices hedged up during early Tuesday trading as investors start the new year, holding on to the belief that the Federal Reserve won't wait long to begin cutting rates in 2024. There is a growing consensus among traders that the Fed will deliver a 25 basis point cut in March, as inflation has slowed down more than predicted, and economic data is becoming increasingly soft. Against this background, Friday's nonfarm payroll data will be an important moment as it could confirm the slowing down in the US employment market, which is one of the Fed's main concerns. Should such a scenario materialise, bets of a rate cut in March will rise even more, as will the price of gold.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
EU markets started 2024 on an optimistic foot, as investor appetite for risk resurges following a 3-week consolidation for equities.
Benchmarks were in the green from Frankfurt to Madrid for the year's first trading session, with all sectors registering positive performances.
Energy stocks were the top movers this morning, with market sentiment supported by rising oil prices due to the prospect of escalating geopolitical tensions after an Iranian warship was spotted entering the Red Sea.
It is still hard to say if this morning's bullish sentiment will remain alive for long as today's macro agenda isn't loaded, apart from the US PMI data due later this afternoon.
Even if investors remain widely optimistic regarding the outcome for global economies this year, with decreasing inflation and recession fears, they will remain data dependent.
The end of the week will likely provide a much better picture of market sentiment as significant data on the employment and inflation front are expected from the US and the EU over the next few days.
Currently, the STOXX-50 index trades in the upper part of its trading range, challenging the 4,555.0pts resistance.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActiveTrader
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