Check out our FAQ page here for questions about the unavailability of MT4/MT5 on the Apple App store. Read More

Daily Wrap Up 09 February 2022

9 Feb 2022 04:42 PM

Stock market bulls return, gold rises  

Equity markets are higher across the board as European traders picked up the bullish baton from their counterparts in Asia overnight, and the optimistic mood is doing the rounds in the US too. The FTSE 100 hit a two year high as a rally in commodity stocks assisted the benchmark. BP shares have rebounded from the declines posted yesterday, and the stock is up over 3%, while mining giant Rio Tinto is up over 1% due to higher metal prices. The British banking sector has cooled from its recent upward move following the Bank of England’s hawkish update last week. Stocks have experienced a lot of volatility in recent weeks due to worries about the Federal Reserve potentially hiking rates, and rising political tensions in Eastern Europe, but the fear factor surrounding those potential outcomes has declined, hence why we are seeing indices drive higher again.

There was little in the way of economic announcements today, so volatility is low in the currency markets. The dollar has dropped following its rally that commenced last Friday in the wake of the impressive US non-farm payrolls report. The dip in the greenback has lifted GBP/USD and AUD/USD. Tomorrow, US CPI will be posted, and it will be in focus as the last report came in at 7%, the highest mark since 1982. Higher costs are a major issue for the Fed, which is a large reason behind the decision to taper the quantitative easing programme and issue hawkish updates. Following the latest jobs report, the Fed funds futures market was pricing in at least five rate hikes this year. Should the CPI rate ticker higher again, that could ramp up chatter the US central bank might deliver a series of rate hikes.

Gold registered a two-week high as the decline in the dollar worked in the metal’s favour. The asset typically has an inverse relationship with the greenback so the pullback in the dollar is aiding the metal. Also, the talk about surging inflation is also driving up demand for gold as it is a popular defence against rising inflation. Silver also hit a two-week high but has since pulled back. WTI was jolted higher by the Energy Information Administration report as US oil stockpiles fell by 4.7 million barrels, a far greater decline than the one million barrels expected. Such a large drop in inventories speaks to high levels of demand.

Prices may be delayed by 5 seconds. Prices above are subject to our website terms and conditions. Prices are indicative only