This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
The Most Important News For Today
Credit Suisse is on fire
Who’s thinking that Credit Suisse is sinking? Stocks fell by 24.24%. A total disaster. Four years of constant falling. Credit-default swaps are 18 times higher than UBS CDS and nine times higher than Deutsche Bank CDS. It seems like SNB will recapitalize the bank.
The result of the Credit Suisse crisis is the situation with the EU banks’ stocks. Barclays Bank (BARC) -9% during the day, Deutsche Bank -9.27%. Is it time for the correction? Do you trade stocks?
EUR fell too. EURUSD plunged by almost 1.5% - lower than 1.06. Now EURUSD started rising again.
Most important statistics for today
US PPI is around 0% level. PPI YoY is 4.6%, meaning that the sequence of rate hikes gives the result. Retail sales fell in February by 0.4%. But nobody cares. Everybody was watching CS, SVB, etc…
Oxford Economics: ‘Despite the increased stress in the banking system, the Fed remains focused on curbing inflation’;
Moody’s: ‘The Fed is unlikely to raise rates in March, given the turmoil in the banking sector’;
Harris Financial Group: ‘When the Fed raises rates by 5% for a few months, things like SVB happen. The Fed is the cause of the crisis, and it will probably need to cut rates to fix it’.
The market mostly expects that the rate won’t be changed soon.
New Zealand GDP fell for the fourth quarter of 2022 by 0.6%. NZDUSD fell yesterday by 0.77%. The current local trend seems bullish. If NZDUSD breaks 0.61800, it will be time to trade up.
The ECB interest rate decision is expected today at 15:15 GMT+2. The market expects +50 bp – to 3.5%. We have doubts about that, considering the situation in the markets. A lower pace means that EUR may fall.
BTCUSD is stable, fluctuating around the 24500 level. It may move higher. What are your ideas, guys?
XAUUSD bounced back from 50MA and is slightly growing. The situation with the price will depend on the monetary authorities. If there are statements from the officials saying that the condition is stable (putting off the fire), Gold may fall.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.
The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.
Consumer Price Index, Existing Home Sales, US Fed rate decision - all of these things we will discuss in our new review. Don't miss it out!
The RBA and the Bank of Canada will add volatility to the AUD and the CAD, while USD is expected to be boosted by the Non-farm payrolls.
We prepared an outlook of major events of this week. Check it and be ready!