Market Update by Solidecn.com

[Solid ECN]

Silver Prices Dip Amid Fed Rates & Demand Outlook


Silver prices fell below $22.5 for each ounce, marking the lowest point in two weeks. This drop was mainly because the hope for lower Federal Reserve interest rates diminished. Jerome Powell and other officials emphasized that any reduction in interest rates would be gradual and unlikely to start in March. Furthermore, recent U.S. jobs and services data, which was better than expected, suggested that the cost of borrowing might remain high until late spring. This situation made investments that don't produce income, like silver, less attractive.

However, silver did see some positive momentum from the anticipation of more support for China, the biggest consumer of silver, and the forecast of rising demand throughout the year. The Silver Institute's latest report predicted that the global demand for silver would hit 1.2 billion ounces in 2024, making it the second-highest demand level ever recorded, mainly due to industrial purchases.

[Solid ECN]

Gold Price Stable as Fed Rate Cut Chances Dip



Solid ECN - Gold's price stabilized above $2,030 per ounce on Thursday, supported by decreases in dollar and Treasury yields. This situation arose as investors waited cautiously for upcoming talks from US Federal Reserve officials, looking for hints about future monetary policy directions. However, the expectation for a reduction in interest rates was tempered by unexpectedly strong US employment and services data and strong statements from Fed Chair Jerome Powell.

In a recent interview, Powell confirmed that a rate decrease in March is not likely, echoing his earlier remarks following the FOMC meeting. He also mentioned that the Federal Reserve plans to reduce rates more slowly than investors might anticipate. Currently, the likelihood of a rate cut by the Fed in March is perceived to be below 20%, a sharp decline from the two-thirds probability expected at the beginning of the year.

[Solid ECN]

Dollar Index Stabilizes; Fed Rate Cut Odds Dip


Solid ECN - The dollar index hovered around 104 on Thursday, decreasing for two consecutive days. This happened as investors analyzed recent comments from Federal Reserve officials to understand future interest rate changes. The Boston Fed President Susan Collins mentioned that the Federal Reserve cautiously evaluates the latest data and forecasts. She indicated that adjusting the policy might be suitable later this year.

Currently, the market expects a less than 20% possibility of a rate decrease by the Fed in March. This expectation has significantly dropped from the beginning of the year when it was closer to two-thirds. Investors are now waiting for new data on jobless claims this Thursday to check the state of the job market. While the dollar maintained its recent downturn against most major currencies, it performed well against the Japanese yen.

[Solid ECN]

Aussie Dollar Rises Amid Rate Hike Warnings


Solid ECN - The Australian dollar climbed past $0.65, recovering from lows not seen in 11 weeks. This happened after the Reserve Bank of Australia decided not to change interest rates, a move many anticipated. However, the bank also hinted at raising rates if high inflation continues. It noted that inflation dropped more than foreseen in the last quarter, yet it's unclear when it will stabilize within the desired 2-3% range. Australia's inflation rate was 4.1% year-over-year in the last quarter, a decrease from 5.4% the previous quarter and lower than the predicted 4.3%.

The monthly inflation rate decreased to 3.4% in December from November's 4.3%, not meeting the expected 3.7%. Despite these figures, the Australian dollar is still feeling the heat from a strong U.S. dollar, bolstered by positive economic data from the U.S. and the Federal Reserve's firm stance, which has made people less hopeful for a rate decrease.

[Solid ECN]

UK Pound Stabilizes Amid Interest Rate Talks


Solid ECN - The British currency stabilized at around $1.26, staying near its seven-week low point of $1.2515 from February 5th due to the strong US dollar. This happened as investors soon became less optimistic about the US reducing interest rates. Similarly, expectations for a quick interest rate reduction by the Bank of England were dialed down after Chief Economist Huw Pill mentioned that a rate decrease was not imminent, describing it as inevitable but not immediate.

In February, UK interest rates remained at their highest in nearly 16 years, with a notable voting difference: two members favored increasing rates, whereas one was for reducing them. The likelihood of the Federal Reserve cutting rates by May is seen as over 50%, with the Bank of England expected to do the same by June.

[Solid ECN]

Euro Hits New Low Amid Dollar Strength



Solid ECN - The euro fell to a new low of $1.07, its lowest since November 13th, as the US dollar grew more robust. This happened because people lost hope that the US Federal Reserve would start cutting interest rates soon. Meanwhile, the European Central Bank (ECB) is expected to slow down the easing of its monetary policy, even after some weak economic reports. Predictions now show that the ECB might cut interest rates by about 125 basis points this year, a decrease from the 160 basis points forecasted at January's end.

A survey from the ECB showed that people in the Eurozone expect inflation to be around 3.2% over the next year, the lowest expectation since February 2022. Additionally, the Eurozone saw its most significant drop in retail sales in a year this December, while Germany's factory orders increased by 8.9%, the highest in more than three years, mainly due to a very high number of aircraft orders.

[Solid ECN]

Stock Market Updates: Earnings Season Midpoint





Solid ECN - US stock futures showed little movement on Wednesday, with investors looking closely at the latest earnings reports during the mid-point of the earnings season. After the market closed, Snap's shares dropped 32% because it did not meet revenue expectations and predicted weak future earnings. On the other hand, Ford's shares increased by 6% thanks to its quarterly earnings surpassing expectations and positive future earnings outlook. Enphase Energy also saw its shares rise by 12%, driven by forecasts of better demand shortly.


During Tuesday's regular trading, the Dow increased by 0.37%, the S&P 500 went up by 0.23%, and the Nasdaq Composite slightly rose by 0.07%. This was because nine out of eleven sectors in the S&P 500, especially materials, real estate, and healthcare, finished the day higher.


This improvement was attributed to strong corporate earnings boosting investor mood despite the Federal Reserve's resistance to cutting interest rates. In other corporate news, Palantir Technologies experienced a significant surge of 30.8% after it projected profits higher than what was anticipated. Similarly, GE Healthcare's shares climbed 11.7% following positive earnings announcements.

[Solid ECN]

Oil Prices Rise Amid Middle East Tensions, Down 7%




Solid ECN - WTI crude oil prices climbed above $73.5 a barrel on Wednesday, marking a third consecutive session of gains due to concerns over potential supply interruptions in the Middle East. Market analysts believe the ongoing regional tensions could lead to fears of supply shortages factoring into oil prices.


Despite the US responding with airstrikes on Iran-supported groups in Iraq, Syria, and Yemen and hinting at more to come, Iran appears to continue its support for these militias with weapons and intelligence. However, oil prices have fallen by about 7% since the end of January, influenced by progress in peace talks between Israel and Hamas, dwindling hopes for immediate cuts in US interest rates, and ongoing worries about China's economic rebound affecting global demand.

[Solid ECN]

Oil Prices Rise Amid Middle East Tensions



Solid ECN - WTI crude oil prices increased to about $73 per barrel on Tuesday, continuing the previous day's gains. This rise was mainly due to growing concerns over potential disruptions to oil supplies from the Middle East, fueled by increasing tensions in the area. Notably, analysts have highlighted recent US airstrikes against militias supported by Iran, though US officials have clarified their intention to avoid a broader conflict in the region.

Despite these tensions, there has been no immediate impact on the oil supply, helping prices recover slightly after suffering significant losses last week. Specifically, oil prices dropped by over 7% last week, driven by advances in peace talks between Israel and Hamas, which diminished fears of supply disruptions from the Middle East. Additionally, reduced expectations for imminent cuts to interest rates by the US Federal Reserve and ongoing worries about China's economic recovery have further pressured the outlook for global oil demand.

[Solid ECN]

EURUSD Tests Support, Eyes Resistance



Solid ECN - The EURUSD currency pair is testing the 1.07228 support after it crossed below the bearish flag. The pair’s value rose to 1.07619 in today’s trading session, which coincides with the broken channel that now acts as resistance. The awesome oscillator bars turned green, but the RSI indicator is still close to the 30 level. The pullback might extend to the Ichimoku cloud resistance area if the EURUSD bulls can close and stabilize the price above 1.07619.

On the flip side, a failure in the above scenario will lead the EURUSD price to decline further to the next support area, the 1.0658 mark.