Market Recap – Yen, Oil & Bitcoin Hit Key Resistance Levels Ahead of US Inflation Week

 Economic Indicators & Central Banks:

  • Markets are closed for the holiday in mainland China, Taiwan, South Korea, Indonesia, the Philippines and Vietnam.
  • Treasuries declined for a 2nd straight session & Wall Street closed with small gains, as the market continues to shed expectations on Fed rate cuts ahead. The catalyst for selloff was the declines in initial and continuing jobless claims, reversing some of the recent increases and indicating the job market remain solid. 
  • Nikkei (JPN225) saw an uptick at Friday’s close, pulling back from a 34-year peak as investors are in a profit taking mode in this 3rd week of gains. It edged up by 0.09% to 36,897.42 after surging as high as 1.15% to 37,282.26, marking its highest level since February 1990.
  • German HICP inflation was confirmed at 3.1% y/y in the final reading for January. Inflation is still far above the ECB’s target, but on a clear downtrend, and for the doves at the ECB that is enough to start weighing rate cuts.

Market Trends:

  • European futures declined cautiously ahead of US inflation data, while Asia geared down for the Lunar New Year holiday.
  • Australian equities remained relatively stable, while Japanese stocks displayed mixed performance, partially supported by a weaker yen.
  • The Nikkei rallied 2.1%, mainland China bourses and the Hang Seng corrected again.
  • SoftBank Group surged by 8.72%, extending its upward trajectory for a 2nd day following the tech investment firm’s return to profitability after 5 quarters. The rally in SoftBank Group Corp. shares was propelled by a more-than-55% surge in Arm Holdings (Arm chip design unit), in which SoftBank holds a 90% stake, after the British tech company forecasted quarterly sales and profit surpassing Wall Street expectations.
  • Nissan plummeted by 12% after the company failed to meet profit estimates.

Financial Markets Performance:

  • The USDIndex remained steady ahead of the annual revisions to monthly US inflation data, following last year’s revisions that raised doubts about the Federal Reserve’s progress in managing consumer prices.
  • The Yen stabilized after a 0.8% decline against the USD on Thursday, triggered by comments from a BoJ deputy governor hinting at the central bank’s continued accommodative policy stance. The USDJPY broke 149 and extended to 149.49.
  • NZDUSD climbed to 0.6133 along with New Zealand yields following ANZ Bank New Zealand Ltd.’s forecast of 2 more interest rate hikes by the RBNZ this year.
  • USOIL broke $76, eyes on $80 resistance level.
  • Bitcoin spiked to 1-month high above $46,000, with historical data indicating positive returns post-Lunar New Year holidays, averaging over 10% in 10-day returns since 2014.
  • Ether, Solana and Cardano also pushed upward.

Click here to access our Economic Calendar

Andria Pichidi

Market Analyst

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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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