Ipek Ozkardeskaya
Swissquote Bank Ltd
Yesterday was, again, a fantastic day of trading for equities, as the less hawkish than expected tone from the European Central Bank (ECB) and the Bank of England (BoE) meetings joined the optimistic vibes from the Federal Reserve (Fed) Chair Jerome Powell’s ‘disinflationary process’ mention a day before, and all that combined with Facebook’s best rally in almost a decade painted the market in the green.
The S&P500 gained around 1.50%. Nasdaq 100 jumped more than 3.5% and entered bull market as Meta jumped more than 23%.
But today will probably not be as fantastic as yesterday, as Apple, Amazon and Google announced earnings after the bell yesterday, and they all disappointed. Maybe, the again-important US jobs data could temper the earnings-triggered weakness – if of course the NFP number, and more importantly the wages growth are sufficiently soft to keep the Fed doves in charge of the market.
Elsewhere, the European Central Bank (ECB) and the Bank of England (BoE) raised their rates by 50bp yesterday, but Lagarde sounded much less aggressive than the December meeting.
The EURUSD sold off.
But I believe that the euro’s recovery hasn’t ended just yet, as we see the end of the tunnel for the Fed – as the Fed rates approach the 5% mark, while we don’t yet see the end of the tightening tunnel for the ECB.
This report has been prepared by Swissquote Bank Ltd and is solely been published for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any currency or any other financial instrument. Views expressed in this report may be subject to change without prior notice and may differ or be contrary to opinions expressed by Swissquote Bank Ltd personnel at any given time. Swissquote Bank Ltd is under no obligation to update or keep current the information herein, the report should not be regarded by recipients as a substitute for the exercise of their own judgment.
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