- Nasdaq and S&P continue the run higher. Dow closes with a modest decline
- Amazon, Apple and Alphabet earnings after the close
- The US jobs report will be released tomorrow at 8:30 AM ET. What to expect?
- WTI crude futures settle at $75.88
- BOE Bailey: Cannot say for sure that any further rate rise will be in smaller steps
- SNB Jordan: Price stability does not happen automatically. EURCHF lower on the day.
- European major indices close today with solid gains German Dax has best day since Jan 4
- Bank of England Bailey: I'm not saying we're done with rate rises
- ECB sources: See at least two more rate hikes
- US factory orders for December 1.8% versus 2.2% estimate
- ECBs Lagarde:We intend to raise rates by 50 BPs @ the next meeting & then monitor the path
- Canada building permits for December -7.3% versus -5.0% expected
- US preliminary nonfarm productivity for 4Q 3.0% versus 2.4% estimate
- US weekly initial jobless claims 183K versus 200K estimate
- ECB raises key rates by 50 bps in February monetary policy meeting, as expected
- More comments from BOE officials: Consumers are becoming more resistant to higher prices
- ForexLive European FX news wrap: BOE sends sterling tumbling, ECB up next
- BOE's Bailey: Language change reflects a turning of the corner but it is very early days
- The NZD is the strongest and the GBP is the weakest as the NA session begins
- BOE's Bailey: We are seeing first signs that inflation has turned the corner
- US January Challenger layoffs 102.94k vs 43.65k prior
- BOE raises bank rate by 50 bps to 4.00%, as expected
The Bank of England and ECB both raised rates by 50 basis points. For the Bank of England it's rate has now moved to 4.0% from 0.1% low. It is the second 50 basis point hike in a row. It raised by 75 basis points in the meeting prior to the last two. After one hike of 15 basis points to start the tightening process, the Bank of England has had 4 separate 25 basis point hikes, followed by 50 BPs, 50 BPs, 75 BPs, 50 BPs and 50 BPs to get the rate up from 0.1% to 4.0%. The vote this month came in at 7 to 2 with Tenreyro and Dhingra voting for no change.. That was the same at the last meeting.
For the ECB, its main rate moved up to 3.0% from 2.5%. ECB has raised by 50 BPs, 75 BPs, 75 BPs, 50 BPs and another 50 BPs in its march up from 0% to 3.0%. The ECB was more delayed in starting their tightening process.
For the Bank of England, the statement got rid of the word "forcefully" in its guidance and instead stated that "if there were to be evidence of more persistent pressures, then further tightening of monetary policy would be required". Is a pause in the cards?
Bailey later said that he "cannot say for sure that any further rate rises will be in smaller steps", and "I am not saying were done with rate rises". So there is a little hedge in his post comments. Nevertheless the GBP is ending the day as the weakest of the major currencies with a decline of -1.16% versus the US dollar and -1.35% versus the JPY being the biggest movers.
As far as the ECB and Lagarde, she did her best to be hawkish, by pre-announcing another 50 bps hike when the central bank meets again in March, but she did say that they would evaluate the subsequent path of monetary policy after that. Lagarde said that there was large consensus (presumably on the rate path for this meeting and next), but there was some opposition to the discussion on communication (I guess the preannounced March increase).
The EURUSD moved mostly lower on the day with declines of -0.73% vs the USD and -0.90% vs the JPY, but it did rise vs the GBP by 0.50% and was also up marginally up vs the AUD (+0.12).
Looking at the strongest weakest of the major currencies, the JPY is the strongest while the GBP is the weakest.
A snapshot of other markets near the close shows:
- Spot gold felt $-37.67 or -1.93% at $1912.52
- Spot silver fell $0.51 or -2.13% at $23.45
- WTI crude oil fell $0.53 at $75.88
- Bitcoin is trading at $23,662
In the US stock market, the NASDAQ index continued its surge to the upside with a gain of 3.25%. That comes after gains of 1.67% on Tuesday and 2.0% on Wednesday.
The S&P index added 1.47% today after a 1.0% gain yesterday.
The Dow Industrial Average had a modest decline of -0.11%. Yesterday it squeaked out a modest gain of 0.02%. There has been a reallocation out of the industrials, into more of the riskier tech stocks of late.
That is the good news.
The not so good news is earnings after the close were a bit disappointing with Apple, Amazon and Alphaphet (GOOGL) all missing.
- Apple shares closed at $150.66 and are trading in after hours at $144.78
- Amazon close at $112.91 and is trading at $109.59 in after-hours
- Alphabet close at $107.74 and is trading at $103.84 in after-hours
Indications point toward a lower opening at least right now for tomorrow's market ahead of the US jobs report.
Tomorrow at 8:30 AM ET, the US will announce their jobs report for the month of January. The expectations show:
- Nonfarm payroll is expected at 185K versus 223K last month.
- The three-month average is 247K, while the six-month averages 307K and the year average is 375K.
- The unemployment rate is expected to rise by 0.1% to 3.6% from 3.5% last month.
- Average hourly earningsEarningsA company’s earnings represent its profits or net benefits as a result of its operation.Earnings are the net benefits of a corporatio...Read this Term for the month are expected to rise by 0.3%. That is unchanged from last month
- Average hourly earnings YOY are expected to dip to 4.3% from 4.6% last month. That would be the lowest since August 2021. Pre-pandemic, the year-over-year increases were between 2.8% and 3.4%
- Average work week is expected to remain unchanged at 34.3 hours
- Last month the participation rate came in at 62.3%
- Private payrolls are expected to rise by 190K
- Manufacturing payrolls are expected to rise by 6K versus 8K last month
Another day to buckle up.
