Fed decision looms large over markets

Chris Beauchamp IG

Stocks are already displaying plenty of nervousness ahead of the Fed decision this week, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Dow notches up new high but other indices muted

A new record high for the Dow contrasts with a more cautious attitude across most other equity markets, where gains have been limited at best. A cautious pruning of risk has been in evidence for most of the day, with the mood soured by reports of poor sales for Apple’s new product.

Stocks look towards Wednesday’s Fed meeting

Last week saw a late surge in expectations around a 50bps rate cut, a recognition that the Fed’s window to ease policy is limited by the election. Recession fears have spiked dramatically, and investors have an unnerving feeling that the Fed is firmly behind the curve. A 50bps move might help to stop that perception from spreading further, though Powell will have to perform a delicate balancing act to avoid giving the impression that they are more concerned about the near-term outlook.

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Chris Beauchamp

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.