Daily Wrap Up 31 January 2022

31 Jan 2022 04:24 PM

NASDAQ leads the rally, dollar cools

The mood in equity markets is a lot more optimistic today than it was last week, and even though the headlines about the Federal Reserve potentially hiking interest rates several times this year are still doing the rounds. This day last week, European and US indices fell to multi-month lows because of mounting fears about a possible war between Russia and Ukraine, worries about quick monetary tightening from the Fed were a factor too. Over the past week, stock markets have ticked up, and it seems that dealers are getting used to the idea the US central bank will carry out multiple rate hikes this year. The NASDAQ 100 has suffered the most during the recent bearish period due to its large exposure to technology stocks, by contrast the NASDAQ 100 is up over 2% today - its high mark in more than one week.

The eurozone economy expanded by 0.3% in the last quarter of 2021, and that was a large drop off from the 2.2% growth posted in the preceding quarter. Economists were expecting 0.4%, it wasn’t a surprise that the growth reading was disappointing seeing as last week it was announced that Germany’s economy contracted by 0.7% in the last three months of the year. It spells trouble for the entire currency bloc if the largest economy is going through a phase of negative growth. Despite the downbeat euro area GDP reading, the euro is performing well. EUR/USD rebounded from the 19-month low that was seen last Friday. The US dollar index has been driving higher recently but today it cooled a little. AUD/USD is majorly benefitting from the slide in the greenback as the rally in commodities is giving an extra boost to the Australian dollar, the currency pair is up over 0.8%.

Gold is up on the day thanks to the weaker US dollar, but the metal is still trading below the $1,800 mark. At the end of last week, the yellow metal dropped to its lowest level in over four weeks on account of the bullish move in the dollar. Industrial metals such as silver and platinum are enjoying upward moves on account of the overall upbeat mood. WTI and Brent crude have edged lower following the new seven-year highs that were seen last week. Even though the tensions surrounding Russia-Ukraine haven’t risen further, the over fragile atmosphere is keeping oil at an elevated level.

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