FTSE 100 and Dow surge as rotation trade gathers pace

Chris Beauchamp IG

The FTSE 100 has gained 60 points today, while on Wall Street the Dow Jones has surged out of the gate, shrugging off weakness in tech stocks, says Chris Beauchamp, Chief Market Analyst at online trading platform IG.

Stocks rally – Except Big Tech

“Just as worries about poor market breadth hit the mainstream, breadth begins to recover. Last week saw Nvidia soar and the Nasdaq 100 hit 20,000, but the new week has continued where Friday left off, with old economy stocks rallying and tech continuing to drop back. This kind of rotation is very healthy for a continuation of the rally into July.”

FTSE 100 at two-week high

“Fresh inflows are driving the FTSE 100 higher too, and the gains are not confined to the UK. Political risk is off the agenda today it seems, as the CAC40 shrugs off impending French elections and the Dax makes gains too. Despite a lack of news today it seems that investors remain content to buy the dip.”

Author

Chris Beauchamp

EUR/USD stays below 1.1850 after dismal German sentiment data

EUR/USD stays in negative territory below 1.1850 in the second half of the day on Tuesday. Renewed US Dollar strength, combined with a softer risk tone keep the pair undermined alongside downbeat German ZEW sentiment readings for February.

GBP/USD falls toward 1.3550, pressured by weak UK jobs report

GBP/USD remains under bearish pressure and extends its decline below 1.3600 on Tuesday. The United Kingdom employment data suggested worsening labor market conditions, bolstering bets for a BoE interest rate cut next month and making it difficult for Pound Sterling to stay resilient against its peers.

Gold recovers modestly, stays deep in red below $4,950

Gold (XAU/USD) stages a rebound but remains deep in negative territory below $4,950 after touching its weakest level in over a week near $4,850 earlier in the day. Renewed US Dollar strength makes it difficult for XAU/USD to gather recovery momentum despite the risk-averse market atmosphere.

Canada CPI expected to show sticky inflation in January, still above BoC’s target

Economists see the headline CPI rising by 2.4% in a year to January, still above the BoC’s target and matching December’s increase. On a monthly basis, prices are expected to rise by 0.1%.

UK jobs market weakens, bolstering rate cut hopes

In the UK, the latest jobs report made for difficult reading. Nonetheless, this represents yet another reminder for the Bank of England that they need to act swiftly given the collapse in inflation expected over the coming months.

Stellar mixed sentiment caps recovery

Stellar price remains under pressure, trading at $0.170 on Tuesday after failing to close above the key resistance on Sunday. The derivatives metric supports the bearish sentiment, with XLM’s short bets rising among traders and funding rates turning negative.