The German Index set an all-time high. Bitcoin rate reached 2-year high :: InvestMacro

By JustMarkets

The US stock indices posted moderate losses on Wednesday. Pressure to liquidate long positions from recent record highs weighed on the stock market ahead of Thursday’s PCE deflator report, the Fed’s preferred inflation gauge. The Dow Jones Index (US30) was down 0.06% at the stock market close yesterday. The S&P 500 Index (US500) lost 0.17%. The NASDAQ Technology Index (US100) closed the day negative 0.55%. On Wednesday, the hawkish comments from Fed members Williams, Bostic, and Collins also hamstrung the indices when they said they favored a wait-and-see stance before cutting interest rates. Markets now expect the US central bank to keep interest rates unchanged in March and May, but there is more than a 50% chance of a rate cut in June.

Wednesday’s Q4 US GDP report was mixed for the dollar, with Q4 GDP revised downward (from 3.3% to 3.2% y-o-y) but still pointing to a robust economy.

The bitcoin exchange rate (BTC/USD) rose more than 6% on Wednesday, hitting a 2-year high following the successful launch of spot bitcoin ETFs in the US. The ETFs have raised more than $6 billion since they began trading on January 11, with some analysts warning of a looming supply shortage as new coins from bitcoin miners fail to keep up with demand. Additional demand has been sparked by the expected April 20 halving of bitcoin issuance. About 80% of the bitcoin supply has not changed hands in the past six months, which could exacerbate the situation and contribute to a further rise in bitcoin prices. Additionally, speculation is growing around the possible approval of spot ETFs, potentially driving higher Ethereum (ETH/USD) prices.

Equity markets in Europe traded flat on Wednesday. Germany’s DAX (DE40) rose by 0.25%, France’s CAC 40 (FR40) gained 0.08% yesterday, Spain’s IBEX 35 (ES35) declined 0.45%, and the UK’s FTSE 100 (UK100) closed negative 0.76%.

On Wednesday, Frankfurt’s DAX (DE40) Index, outperforming European benchmarks on the back of strong corporate earnings, held on to early gains and hit a new record. Puma shares closed by 5% higher after meeting full-year targets and announcing a new brand campaign. Meanwhile, technology stocks came under pressure after Dutch semiconductor equipment maker ASM International reported lower fourth-quarter earnings, sending Infineon down 4% and SAP down 1.5%.

ECB Governing Council representative Kazaks said yesterday that the ECB should not be in a hurry to cut interest rates as there is a risk that tighter measures will be needed later. His colleague, ECB Governing Council representative Kazimir, added that the ECB has no reason to rush interest rate cuts and prefers June as the first rate cut. Swaps estimate the odds of a 25 bps ECB rate cut at 5% at the next meeting on March 7 and 32% at the next meeting on April 11.

The latest EIA report showed a larger-than-expected increase in US crude oil inventories of 4.199 million barrels last week, although much smaller than the 8.428 million reported by the API. The rise in inventories is mainly attributed to a slowdown in processing crude oil into finished products at refineries. Looking ahead, investors are eagerly anticipating the upcoming OPEC+ meeting in March to discuss extending production cuts. Producers will likely stick to voluntary production limits until at least the June ministerial meeting to help stabilize the market. In addition, uncertainty surrounding the ceasefire between Israel and Hamas, as well as ongoing Houthi attacks on ships in the Red Sea, have increased the risk premium in oil prices.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) decreased by 0.08% yesterday, China’s FTSE China A50 (CHA50) was down 0.24% on Wednesday, Hong Kong’s Hang Seng (HK50) fell by 1.51% on the day, and Australia’s ASX 200 (AU200) was negative 0.03% on the day. The Hang Seng Index (HK50) opened higher on Thursday, reversing a decline after removing measures to curb housing demand as part of the 2024 budget, including the complete abolition of housing levies. Wednesday’s GDP report showed the city’s economy grew by 4.3% y/y in Q4 2023, the highest growth in 2 years, on the back of a rebound in inbound tourism and a recovery in private consumption.

Fresh data showed that Australian retail sales rose by 1.1% month-on-month in January 2024, reversing an upwardly revised 2.1% drop in the previous month but falling short of market consensus, which expected a 1.5% rise.

S&P 500 (US500) 5,069.76 −8.42 (−0.17%)

Dow Jones (US30) 38,949.02 −23.39 (−0.06%)

DAX (DE40)  17,601.22 +44.73 (+0.25%)

FTSE 100 (UK100) 7,624.98 −58.04 (−0.76%)

USD Index  103.95 +0.01 (+0.01%)

Important events today:

• – Japan Industrial Production (m/m) at 01:50 (GMT+2);
• – Japan Retail Sales (m/m) at 01:50 (GMT+2);
• –– Australia Retail Sales (m/m) at 02:30 (GMT+2);
• – Japan Tokyo Core CPI (m/m) at 07:00 (GMT+2);
• – German Retail Sales (m/m) at 09:00 (GMT+2);
• – Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+2);
• – Switzerland GDP (q/q) at 10:00 (GMT+2);
• – German Unemployment Rate (m/m) at 10:55 (GMT+2);
• – German Consumer Price Index (m/m) at 15:00 (GMT+2);
• – US Initial Jobless Claims (w/w) at 15:30 (GMT+2);
• – US PCE Price index (m/m) at 15:30 (GMT+2);
• – Canada GDP (q/q) at 15:30 (GMT+2);
• – US Chicago PMI (m/m) at 16:45 (GMT+2);
• – US Pending Home Sales (m/m) at 17:00 (GMT+2);
• – US Natural Gas Storage (w/w) at 17:30 (GMT+2);
• – US FOMC Member Bostic Speaks at 17:50 (GMT+2);
• – US FOMC Member Mester Speaks at 20:15 (GMT+2).

By JustMarkets

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.