FOREX
The US dollar index dipped slightly in early Wednesday trading as investors took profits ahead of the impending release of the January Fed minutes. After reaching a multi-month peak the previous week, the greenback has been ceding ground against other major currencies as the impact of the Fed's January meeting fizzles out. Even after the hawkish stance of Jerome Powell and his peers, many traders still hope that the central bank may initiate rate cuts within the first half of the year. These same traders are now eagerly awaiting the latest insights from the central bank minutes. Any indications aligning with the Fed's hawkish message at the end of January could bring to an end the recent dollar weakness and usher in renewed gains.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Shares opened lower in Europe on Wednesday, failing to clear historical resistances for a second time, as investors face patchy corporate results and brace for more macro developments from the US in the afternoon.
The STOXX-50 index registered a second rejection below its record level at 4,475.0pts, led mainly by a corrective move from basic material shares following yesterday’s jump after Air Liquide posted strong results.
Despite encouraging results from big corporations such as Carrefour yesterday evening, investors also have to face worries arising from the banking sector, especially after HSBC Holdings Plc published another significant drop in earnings.
While the overall appetite for equity markets remains alive, this mixed picture regarding corporate results prevents the market from breaking its recent record in the short term.
All eyes are now on today’s earning report from chipmaker Nvidia, where a huge increase in revenue ($20.4Bn vs $6.1Bn last year) is widely anticipated.
In addition, the publication of the minutes of the last FOMC meeting should also boost market volatility on a wide range of assets in the afternoon.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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